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Nokia (NOK)
NYSE:NOK
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Nokia
(NYSE:NOK)73Outperform
Nokia (NOK) vs. S&P 500 (SPY)
Market Cap
$28.01B
Dividend Yield1.93%
Average Volume (3M)24.71M
Price to Earnings (P/E)20.7
Beta (1Y)0.52
Revenue Growth-12.68%
EPS Growth95.13%
CountryUS
Employees86,689
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)0.25
Shares Outstanding5,605,850,600
10 Day Avg. Volume32,109,045
30 Day Avg. Volume24,712,498
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)N/A
Price to Sales (P/S)1.27
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.72Price Target Upside11.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Nokia Business Overview & Revenue Model
Company DescriptionNokia is a Finnish multinational corporation specializing in telecommunications, information technology, and consumer electronics. It operates through several segments, including Network Infrastructure, Cloud and Network Services, and Nokia Technologies. The company provides a wide range of products and services, such as mobile networks, fixed networks, IP and optical networks, and software solutions, catering primarily to telecommunications operators and enterprises.
How the Company Makes MoneyNokia generates revenue through its diverse portfolio of products and services across its various business segments. The Network Infrastructure segment contributes significantly to its earnings by offering solutions for mobile, fixed, and IP networks, which are sold to telecommunications operators. The Cloud and Network Services segment provides software solutions and services that enable network optimization, automation, and digitalization, further enhancing revenue streams. Nokia Technologies earns through licensing its extensive patent portfolio, which includes valuable standard-essential patents used in mobile devices and other technologies. Partnerships with major telecom operators and enterprises, as well as ongoing innovation in 5G and beyond, also play a critical role in sustaining and growing Nokia's revenue.
Nokia Financial Statement Overview
Summary
Nokia shows strong balance sheet fundamentals with low leverage and a solid equity base. However, recent declines in revenue, profitability metrics, and reduced cash flow growth pose challenges. The company maintains operational efficiency, but profitability pressures and cash flow dynamics need addressing for improved financial standing.Income Statement
Nokia's revenue has seen fluctuations over the years with a recent decline from 2022 to 2023. Gross Profit Margin improved slightly to 39.04% in 2023, indicating efficient cost management. However, the Net Profit Margin decreased substantially to 2.99% in 2023 from a high of 17.06% in 2022, signifying declining profitability. The EBIT margin stands at 7.58%, showing moderate operational efficiency. Overall, while there are strengths in gross margin, the decline in net income impacts the score.65
Positive
Balance Sheet
Nokia has a healthy debt-to-equity ratio of 0.25 in 2023, reflecting low financial leverage. The Return on Equity (ROE) dropped significantly to 3.24% in 2023 from 19.91% in 2022, indicating reduced profitability relative to shareholder's equity. The Equity Ratio is strong at 51.53%, suggesting a solid capital structure. The overall stability is good, but the decline in ROE weakens the score.72
Positive
Cash Flow
Operating cash flow to net income ratio is high at 1.98, indicating strong cash generation relative to net income. Free cash flow decreased from 2022 to 2023, resulting in a negative growth rate of -23.78%. The free cash flow to net income ratio is robust at 1.00, highlighting effective cash flow management. While cash generation is solid, the decline in free cash flow growth affects the score.68
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 19.82B | 22.26B | 24.91B | 22.20B | 21.87B | 23.32B | Gross Profit |
| 8.45B | 8.69B | 10.22B | 8.83B | 8.21B | 8.33B | EBIT |
| 1.83B | 1.69B | 2.32B | 2.16B | 918.00M | 814.00M | EBITDA |
| 2.73B | 2.94B | 3.55B | 3.23B | 2.05B | 2.47B | Net Income Common Stockholders |
| 378.00M | 665.00M | 4.25B | 1.62B | -2.42B | 18.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.12B | 8.24B | 9.16B | 9.60B | 8.28B | 6.17B | Total Assets |
| 39.53B | 39.86B | 42.94B | 40.05B | 36.28B | 39.13B | Total Debt |
| 3.82B | 5.19B | 5.52B | 5.66B | 6.49B | 5.31B | Net Debt |
| -2.44B | -1.05B | 52.00M | -1.03B | -454.00M | -603.00M | Total Liabilities |
| 24.16B | 19.23B | 21.52B | 22.59B | 23.65B | 23.73B | Stockholders Equity |
| 15.29B | 20.54B | 21.33B | 17.36B | 12.56B | 15.32B |
| Cash Flow | Free Cash Flow | ||||
| 2.62B | 665.00M | 873.00M | 2.07B | 1.28B | -300.00M | Operating Cash Flow |
| 3.12B | 1.32B | 1.47B | 2.63B | 1.76B | 390.00M | Investing Cash Flow |
| 383.00M | 1.04B | -1.88B | -1.79B | -1.52B | -167.00M | Financing Cash Flow |
| -1.72B | -1.50B | -837.00M | -1.21B | 883.00M | -479.00M |
Nokia Technical Analysis
Positive
5.14
Price Trends
4.74
Positive
4.59
Positive
4.28
Positive
Market Momentum
0.12
Negative
61.19
Neutral
81.75
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOK, the sentiment is Positive. The current price of 5.14 is above the 20-day moving average (MA) of 5.00, above the 50-day MA of 4.74, and above the 200-day MA of 4.28, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 61.19 is Neutral, neither overbought nor oversold. The STOCH value of 81.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOK.
Nokia Risk Analysis
Nokia disclosed 37 risk factors in its most recent earnings report. Nokia reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nokia Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $97.81B | 34.84 | 33.14% | ― | 19.50% | 34.64% | |
74 Outperform | $246.89B | 28.02 | 20.02% | 2.50% | -5.34% | -30.57% | |
73 Outperform | $28.01B | 20.73 | 8.27% | 1.93% | -12.68% | 95.13% | |
67 Neutral | $19.81B | 7.82 | 12.09% | 3.29% | 3.30% | 25.00% | |
60 Neutral | $11.94B | 41.91 | 6.21% | 2.44% | -8.82% | -10.01% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
58 Neutral | $28.39B | 14,433.30 | 0.15% | 1.98% | -5.59% | ― |
* Technology Sector Average
Performance Comparison
NOK
Nokia
5.14
1.57
43.98%
CSCO
Cisco Systems
62.06
13.52
27.85%
JNPR
Juniper Networks
35.84
-0.13
-0.36%
ERIC
Telefonaktiebolaget LM Ericsson
8.24
2.74
49.82%
ANET
Arista Networks
77.56
7.10
10.08%
HPE
Hewlett Packard Enterprise
15.34
-2.23
-12.69%
Nokia Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: 16.29% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong finish to 2024 with impressive growth in Network Infrastructure and Nokia Technologies. However, challenges remain in the mobile networks and enterprise segments, with competition impacting performance in specific regions.Highlights
Strong Q4 Financial Performance
Nokia reported a 9% growth in net sales in the fourth quarter, with a gross margin of 47.2% and an operating margin of 19.1%, the highest since 2015.
Network Infrastructure Growth
Network Infrastructure grew 17% in Q4, with IP networks as the standout performer at 24% growth.
Cash Generation and Shareholder Returns
Nokia generated a free cash flow of EUR 2 billion in 2024, ending the year with a net cash balance of EUR 4.9 billion after returning EUR 1.4 billion to shareholders.
Nokia Technologies Expansion
Nokia Technologies saw an 85% net sales growth in Q4, driven by new deals with companies like HP and Samsung.
Data Center Investment
Nokia plans to invest an additional EUR 100 million in its IP networks business to generate EUR 1 billion in incremental net sales by 2028.
Lowlights
Mobile Networks Challenges
Net sales in mobile networks declined by 2% in Q4, with a decrease in operating margin by 380 basis points to 7.7%.
Enterprise Sales Decline
Enterprise sales declined by 4% in constant currency terms in 2024, reflecting broader weakness in enterprise demand.
Competitive Environment
The competitive environment remains challenging, particularly in Latin America and with increased competition from Chinese vendors.
Company Guidance
During Nokia's Fourth Quarter 2024 Results Call, the company provided guidance indicating strong performance and positive outlooks for 2025. In Q4, Nokia reported a 9% growth in net sales, driven by a 17% increase in network infrastructure and a standout 24% growth in IP networks. The company achieved its highest operating margin since 2015 at 19.1% and generated EUR2 billion in free cash flow, ending the year with a net cash balance of EUR4.9 billion. For 2025, Nokia expects strong growth in network infrastructure and cloud and network services, with stable sales in mobile networks despite a 4% headwind from AT&T. The company plans to accelerate investments in its IP networks business, aiming to generate EUR1 billion in additional net sales by 2028. Operating profit for 2025 is forecasted between EUR1.9 billion and EUR2.4 billion, excluding the Infinera acquisition, with a free cash flow conversion rate of 50% to 80%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.