Nokia

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.
Telecom Infrastructure Equipment Market revenue Share
Dell’Oro Group
  • 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.
Nokia
Nokia
  • 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.