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Nokia Oyj ADR NOK

Morningstar Rating
$3.61 +0.05 (1.40%)
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Company Report

Nokia Earnings: Unsurprising Poor Results With Hints of Optimism and a Buyback to Boost Stock

It did not take much for Nokia’s stock to pop, considering how bleak performance had been throughout 2023. Management was less dour than it had previously been and expects a sales pickup in the second half of 2024. With a large net cash position and a cheap stock, the firm also initiated a EUR 600 million buyback that it intends to complete within two years. We don’t expect stellar performance from Nokia, but we don’t believe 2023 was reflective of the firm’s normalized potential. With rival Ericsson sitting in the same boat and global fixed and mobile network investment still required as data usage grows rapidly, we expect significant improvement over the next few years despite our view that Nokia has no moat. We are maintaining our EUR 5.50 fair value estimate and think the stock remains undervalued.

Price vs Fair Value

NOK is trading at a 40% discount.
Price
$3.61
Fair Value
$2.00
Uncertainty
Medium
1-Star Price
$2.40
5-Star Price
$2.20
Economic Moat
Hggpn
Capital Allocation
Wynsxrm

Bulls Say, Bears Say

Bulls

The capabilities of 5G will bring a new market of customers and a longer and more expansive cycle of network spending as enterprises deploy private networks and use Internet of Things functions.

Bears

Nokia’s customer base is concentrated among sophisticated communications service providers and equipment manufacturers, which yield significant buying power, limiting the company's pricing power.

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News

Trading Information

Previous Close Price
$3.56
Day Range
$3.573.62
52-Week Range
$2.944.97
Bid/Ask
$3.57 / $3.61
Market Cap
$19.95 Bil
Volume/Avg
11.1 Mil / 15.9 Mil

Key Statistics

Price/Earnings (Normalized)
11.91
Price/Sales
0.84
Dividend Yield (Trailing)
3.63%
Dividend Yield (Forward)
3.62%
Total Yield
5.27%

Company Profile

Nokia provides telecom equipment and services that are used to build wireless and fixed-line networks. It operates in four segments. The mobile networks segment, which sells equipment and services to telecom carriers to power public wireless networks, is the largest, followed closely by network infrastructure. Network infrastructure focuses on fixed networks, including infrastructure, solutions, and components for IP networks, optical networks, and submarine networks. Cloud and network services is a nascent segment catering to enterprises with as-a-service platforms. Nokia also has a sizable research division and patent business, where it licenses technology used by handset providers, consumer electronics firms, and other firms making electronic and Internet of Things products.
Sector
Technology
Industry
Communication Equipment
Stock Style Box
Large Value
Total Number of Employees
86,900

Competitors

Valuation

Metric
NOK
CSCO
Price/Earnings (Normalized)
11.9111.91
Price/Book Value
0.884.30
Price/Sales
0.843.51
Price/Cash Flow
7.1712.44
Price/Earnings
NOK
CSCO

Financial Strength

Metric
NOK
CSCO
Quick Ratio
1.371.10
Current Ratio
1.661.37
Interest Coverage
4.0533.76
Quick Ratio
NOK
CSCO

Profitability

Metric
NOK
CSCO
Return on Assets (Normalized)
3.94%17.02%
Return on Equity (Normalized)
7.69%38.38%
Return on Invested Capital (Normalized)
5.98%30.59%
Return on Assets
NOK
CSCO
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Communication Equipment Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
CSCO
Cisco Systems IncYkzjd$198.9 Bil
MSI
Motorola Solutions IncSxrvbyb$55.8 Bil
HPE
Hewlett Packard Enterprise CoDvgc$22.3 Bil
NOKBF
Nokia OyjPxvk$19.9 Bil
ZTCOF
ZTE Corp Class HNcz$18.8 Bil
ERIXF
Telefonaktiebolaget L M Ericsson Class BHcm$18.1 Bil
ERIC
Telefonaktiebolaget L M Ericsson ADRTdjg$18.1 Bil
ZBRA
Zebra Technologies Corp Class AHkqwx$15.0 Bil
SATS
EchoStar Corp Class AFsdg$3.5 Bil

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