Stock: NOK
Rating: Good
Author: Waleed M. Tariq
Summary
- The company is focusing on 5G and mobile network infrastructure.
- Nokia and Ericson have 20% of the worldwide telecom equipment market excluding China, but Ericson’s price is excessively volatile.
- I’m bullish on the stock because of the company’s strategic changes.
Bullish
- Nokia stock has risen 35% in 52 weeks due to innovative business practices.
- New leadership has reenergized the company, making the stock a buy.
- If the business resumes dividends, it will undoubtedly win back income investors, as Ford (F) did.
Bearish
- The stock dropped until Q1 2020, when Pekka Lundmark became CEO.
Business Reorganization
- Nokia announced a three-phase business model overhaul after a leadership transition.
- The corporation restructured its financial reporting to fit its strategy, organization, performance evaluation, and resource allocation.
- Nokia provides Group Common and Other segment-level statistics, including RF Systems.
Mobile infrastructure market
- The worldwide telecom equipment market will surpass $100 bn in 2021, up 20% from 2017.
- In 2022, growth is predicted to decline from 7% in 2021.
- Nokia and Ericson can benefit from U.S. efforts to hinder Huawei’s global activities.
The 5G Market
- 5G is gaining global traction and might create 1% of global GDP by 2030.
- 5G services revenue is expected to climb 164% from 2022 and 2026.
- With 214 5G commercial transactions and 74 live 5G networks, the company has upside potential.
Nokia’s Prospects
- Nokia is the only 5G stock with value and growth potential.
- If the business resumes dividends, it will undoubtedly win back income investors, as Ford (F) did.
- Nokia’s P/E ratio of 16.3 is below the industry average of 19.44.
Conclusion
- The fast-growing company has 5G contracts. Long-term prospects are excellent, and low valuation multiples should boost returns.
- All these considerations make the stock a buy for 5G investors.