Motorola's (MOT) been beaten down. Its wife left it. Its dog ran off with Lassie for a shot in Hollywood, and it got laid off from its job at the local mobile-phone manufacturer. The economy is raining golf-ball size hail through the windshield of its newly painted El Camino. Can things get any worse?

That's the big money question.


U.S. Bancorp Piper Jaffray

analyst Sam May called a bottom of sorts for Motorola. About 50% of the company's revenue comes from its trampled wireless handset and semiconductor businesses, units that May thinks are seeing the worst right now in the second quarter and should stabilize and start to improve in the third and fourth quarters. Motorola is selling assets to improve its credit and cutting 22,000 employees to get costs in line. May joins many on the Street with eyes tilted heavenward in the belief that Motorola's financial health will improve in the second half of 2001. His company has not done recent underwriting for Motorola.

A month ago, investors roughed up Motorola's shares over renewed concerns about its credit status --




downgraded its debt rating in February -- leaving them resting at $11.50. The stock has risen 28% in the past month, despite a hideous first-quarter earnings report in the interim. According to May, the company's valuation is roughly in line with its competitors, trading at about 42 times his estimated revenue for 2002 of 38 cents. Using the consensus estimates of 46 cents a share from

Thomson Financial/First Call

for 2002, the stock trades at about 34 times future earnings.

That leaves investors to decide whether Motorola's price of $15.80 at the end of Thursday's trading is a fair price for a company that's fresh off its first loss in ages in the first quarter, expects that loss to widen in the second quarter, lost market share while first-quarter revenue dropped 29% year over year in the handset business and saw its chip sales decline 22% in the first quarter from the same quarter a year ago.

Is that what you'd call a buy?

May would. "Do I think it's solved all its problems and this thing is going to rocket? No," he says. May put a 12-month price target of $20 on the stock. "Certainly it could fall to 14, it could give up a couple bucks. It's not out of the woods yet."

Surely not, given that the company has seen its investments decline from $5.9 billion to $3.2 billion, partly from market declines in its portfolio and partly because it sold $1 billion in phone company assets, according to

JPMorgan H&Q

. Motorola's credit status is still an unanswered question. And last, but not the least controversial, the company is still led by Chris Galvin, despite investor dissatisfaction.

First Union

analyst Mark Roberts put it nicely in early April after Motorola's first-quarter earnings report: "A credibility gap exists between management and investors." Roberts joins many analysts on the Street in suggesting nice, currently upstanding names such as


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for the wireless investor. May agrees that the company "could benefit from senior management change."

Yet May highlights the positives. Motorola is the only company with a phone on the market that addresses the latest technology leapfrog from second-generation wireless system to faster 2.5G systems (GPRS) -- on the way to even faster third-generation wireless speeds. Motorola predicts it will sell 5 million of these GPRS phones in the second half of 2001. Additionally, Motorola is expected to win some of the business

China Unicom

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is negotiating in CDMA infrastructure.

But will that win back investors?