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Nokia (NOK)
NYSE:NOK
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Nokia
(NYSE:NOK)
Select Model
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Rating:63Neutral
Price Target:
$9.00
▲(7.66% Upside)
Action:ReiteratedDate:03/18/26
The score is supported by a resilient financial foundation (manageable leverage, positive free cash flow) and constructive technical trend signals. It is held back by weakening operating performance (declining revenue and 2025 margin/ROE compression) and an expensive valuation (high P/E with modest yield), while the earnings call adds moderate support via optimistic multi-year targets tempered by near-term cost and seasonality headwinds.
Positive Factors
Strong cash generation and net cash
Consistent positive operating cash flow and high FCF conversion provide durable financial flexibility. A net cash position of EUR 3.4bn reduces refinancing risk, funds capex for optical manufacturing, and underpins the ability to absorb cyclical telecom spending shocks or invest in strategic priorities over the next 2–6 months.
AI & Cloud and Optical demand momentum
Structural demand from AI/data-center customers supports higher-growth, higher-margin optical and IP products. Strong order intake and book-to-bill above one imply sustainable backlog and capacity utilization, underpinning multi‑year revenue growth potential and margin recovery as production ramps.
Strategic M&A and portfolio reorganization
The Infinera deal and organizational refocus align technology and go-to-market into higher-value optical, core software, and defense niches. If synergies are realized, this structurally improves product mix, R&D leverage, and long-term competitiveness in optical and private wireless markets.
Negative Factors
Top-line trend weakness
A multi-year revenue decline signals secular or market-share headwinds that impair scale economics. Persistent top-line weakness limits operating leverage, constrains reinvestment capacity, and makes margin and earnings targets harder to sustain absent clear, sustained demand recovery or successful repositioning.
Low ROE and compressed profitability
Declining ROE and compressed net margins indicate weakened capital efficiency and limited returns on shareholders' equity. Over months, this can pressure reinvestment economics and investor patience, and makes it harder to fund growth initiatives without improving core operating profitability.
Integration, restructuring and margin pressures
Large ongoing restructuring and integration costs plus investment-related margin pressure create execution risk. These cash and P&L drags can depress reported margins and divert management attention, delaying realization of synergies and denting durable margin recovery over the next 2–6 months.
Nokia (NOK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$46.96B
Dividend Yield2.26%
Average Volume (3M)48.70M
Price to Earnings (P/E)49.4
Beta (1Y)0.36
Revenue Growth5.05%
EPS Growth115.92%
CountryUS
Employees78,434
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.19
Shares Outstanding5,742,239,700
10 Day Avg. Volume59,165,887
30 Day Avg. Volume48,700,257
Financial Highlights & Ratios
PEG Ratio-0.95
Price to Book (P/B)1.42
Price to Sales (P/S)1.56
P/FCF Ratio21.19
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue2.06
Enterprise Value/Gross Profit4.90
Enterprise Value/Ebitda20.34
Forecast
1Y Price Target
$7.30Price Target Upside-12.68% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.37
Revenue Forecast (FY)$23.97B
Nokia Business Overview & Revenue Model
Company DescriptionNokia Oyj provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies. It offers products and services for radio access networks covering technologies from 2G to 5G, and microwave radio links for transport networks. The company provides fixed networking solutions, such as fiber and copper-based access infrastructure, and cloud and virtualization services, as well as wi-fi portfolio, including mesh solutions and cloud-based controllers; IP routing solutions for IP aggregation, and edge and core applications for residential, business, mobile, and industrial services; a portfolio of optical networks comprising portfolio coherent optical transponders, optical transport network switchers, wavelength-division multiplexers, reconfigurable optical add-drop multiplexer solutions, and optical line systems for metro access and aggregation, data center interconnect, regional, and long-haul/ultra-long-haul applications; and submarine networks. In addition, it offers business applications software, cloud and cognitive services, core networks software, and enterprise solutions. Further, the company provides hardware, software, and services, as well as licensing of intellectual property, including patents, technologies, and the Nokia brand. It serves communications service providers, webscales, hyperscalers, digital industries, and government. Nokia Oyj was founded in 1865 and is headquartered in Espoo, Finland.
How the Company Makes MoneyNokia primarily makes money by selling telecommunications network infrastructure and associated software and services to operators and enterprises. Key revenue streams include: (1) Network equipment sales—hardware and software for mobile networks (e.g., RAN/base stations and related components), fixed access, IP routing, and optical transport; revenue is typically recognized through contracts tied to equipment delivery and deployment milestones. (2) Software—licensing and subscriptions for network functions (including cloud-native cores and network management/automation tools), which can be sold as term licenses, subscriptions, or usage-based arrangements depending on the contract structure. (3) Services—professional services (planning, design, integration, deployment) and lifecycle/managed services (maintenance, support, network optimization, and operations assistance), generating recurring revenue through support and service agreements. (4) Patent and technology licensing—monetizing Nokia’s intellectual property portfolio by licensing standards-essential and other patents to third parties; this income is generally higher-margin and can include both ongoing royalties and periodic settlements depending on agreements. (5) Enterprise/private wireless and industrial digitalization solutions—selling private cellular networks and related connectivity/edge solutions to enterprises and industry partners, often bundled with software and services. Significant factors influencing earnings include large multi-year supply and modernization contracts with mobile operators, technology cycles (e.g., 5G upgrades), customer capital expenditure trends, product mix (hardware vs. software/services), and the contribution of higher-margin IP licensing.
Nokia Key Performance Indicators (KPIs)
Any
Revenue by Segment
Highlights revenue contributions from different business units, indicating which segments drive growth and profitability, and where strategic shifts may be needed.
Highlights revenue contributions from different business units, indicating which segments drive growth and profitability, and where strategic shifts may be needed.
Data provided by:
The Fly
The FlyNokia Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call conveyed cautious optimism. Nokia reported modest revenue growth, strong order momentum in Optical and AI & Cloud, multiple design wins and a solid cash position, and it set clear multi-year targets and strategic reorganizations (Infinera acquisition, Mobile Infrastructure, Nokia Defense). At the same time, the company faces near-term margin pressure from growth investments and acquisition/integration costs, restructuring cash outflows, Q1 seasonality headwinds, a notable decline and impairment in Nokia Technologies, and regional/contract-related pressures (e.g., North America). Overall the positives — strategic positioning for AI & cloud, product ramps, design wins, and healthy cash conversion — outweigh the near-term transitional challenges and costs.Q4-2025 Updates
Positive Updates
Quarterly and Full-Year Revenue Growth
Q4 net sales of EUR 6.1 billion, up 3% year-over-year; full-year 2025 net sales EUR 19.9 billion, with full-year operating profit of EUR 2.0 billion (slightly above midpoint of guidance).
Strong Free Cash Flow and Net Cash Position
Q4 free cash flow of EUR 226 million; free cash flow conversion for 2025 of 72% (within guided 50%–80% range); ended Q4 with net cash of EUR 3.4 billion (including a EUR 0.9 billion NVIDIA equity investment).
Network Infrastructure Momentum
Network Infrastructure net sales grew 7% in Q4. Optical Networks grew strongly (reported 17% in the quarter) and book-to-bill for the segment was above 1, supported by AI & cloud demand.
AI & Cloud Customer Traction
AI & Cloud customers accounted for 16% of Q4 net sales and 30% of Optical Networks; the company reported EUR 2.4 billion of orders from AI & cloud customers in 2025.
Optical Product Ramp and Design Wins
800G ZR and ZR+ pluggable products are shipping with initial field performance positive; multiple design wins and supply into scale deployments with focus on ramping production.
IP Networking and Automation Advances
Launched 7220 IXR-H6 data center switching platform and Agentic AI event-driven automation (claimed to reduce network downtime by 96%); secured design win for next‑generation data center switching platform.
Strategic Portfolio and Organizational Moves
Acquisition of Infinera completed to strengthen optical capabilities; created Mobile Infrastructure segment (Core Software, Radio Networks, Technology Standards) and new Nokia Defense incubation unit to target defense and NATO opportunities.
Nokia Shanghai Bell and Expected Synergies
Closed transaction to take full ownership of Nokia Shanghai Bell; expects approximately EUR 200 million run-rate cost synergies and integration costs of EUR 350–400 million over 24–36 months.
Clear 2026 Targets and Multi-year KPIs
2026 operating profit target EUR 2.0–2.5 billion; Network Infrastructure CAGR target 6%–8% (2025–2028) and 10%–12% for combined Optical & IP; Network Infrastructure operating margin target 13%–17% by 2028; Mobile Infrastructure operating profit target at least EUR 1.5 billion.
Order and Partner Momentum for Core Software and Standards
Core Software won a 5G core deal with Telia and expanded Network as Code platform collaboration (over 75 partners, including 43 telcos); Technology Standards maintains ~EUR 1.4 billion contracted net sales run rate.
Negative Updates
Operating Margin Pressure and Short-Term Profit Impact
Q4 operating margin 17.3%, 90 basis points below prior year, driven by increased investments in growth areas (including costs related to the Infinera acquisition) and new product ramp effects.
Segment Gross Margin Deterioration in Network Infrastructure
Network Infrastructure gross margin declined by 80 basis points to 44.6% in Q4, with operating margin impacted by lower gross margin plus increased R&D and acquisition-related costs.
Nokia Technologies Quarterly Decline and Impairment
Nokia Technologies net sales declined 17% in Q4, with an impairment charge of EUR 20 million recorded against a prior asset purchase.
Cloud & Network Services Near-Term Revenue Phasing
Cloud and Network Services declined 4% in Q4 due to revenue recognition phasing, though full-year growth was 6%; gross margin improvement in the quarter benefited partly from a EUR 37 million provision reversal (one-off).
Fixed Networks Deprioritization and Flat Performance
Overall Fixed Networks performance was flat in Q4 despite fiber OLT growth of 16% year-over-year, as Nokia is deprioritizing certain CPE products that dilute margins.
Restructuring and Integration Cash Costs
Reported EUR ~300 million of restructuring in 2025 and guidance of approximately EUR 450 million of cash outflow for restructuring in 2026; integration costs for NSB expected EUR 350–400 million over 24–36 months—pressures on reported vs comparable earnings.
Near-Term Seasonality / Q1 Headwind
Company expects Q1 2026 net sales to decline somewhat more than normal seasonality (historic ~24% sequential drop excluding Nokia Technologies) due to above-normal Q4 2025 activity, creating short-term revenue headwind.
Mobile Infrastructure Top-Line Headwinds and Regional Pressure
Mobile Infrastructure faces top-line headwinds from prior contract losses (notably in North America/AT&T-related impacts); some regional declines observed (India, Greater China) and CNS/Mobile Networks declines in North America in the quarter.
Supply Chain and Manufacturing Scaling Risk
Management acknowledges supply constraints in the broader AI/data-center ecosystem and the need to scale optical manufacturing (CapEx and fab ramp required); ramp timing could limit near-term revenue capture.
Guidance Range and Margin Uncertainty
2026 operating profit guidance spans EUR 2.0–2.5 billion (a EUR 500 million range); management cites new product launches and ongoing investments in AI & Cloud as potential downward pressure on gross margin and OpEx in the near term.
Company Guidance
Nokia guided 2026 operating profit of EUR 2.0–2.5 billion, saying Network Infrastructure growth in 2026 should be in line with its 2025–2028 targets (6–8% CAGR overall and 10–12% for Optical+IP) and that Network Infrastructure operating margin should expand toward 13–17% by 2028 (versus 9.5% in 2025); Mobile Infrastructure is targeted to deliver at least EUR 1.5 billion of operating profit in 2026 (consistent with 2025), Portfolio Businesses (2025: EUR 850 million net sales, EUR 97 million operating loss) are expected to show a lower operating loss in 2026, and Group Common costs are forecast at ~EUR 150 million (vs EUR 190 million in 2025). Additional modelling assumptions include comparable financial income/expense of +EUR 50–150 million, a comparable tax rate around 26–27% with ~EUR 500 million of cash tax outflows, CapEx of EUR 900–1,000 million (to expand optical manufacturing), free cash flow conversion of 65–75% (2025: 72%), end‑Q4 net cash of EUR 3.4 billion, NSB integration run‑rate cost synergies of ~EUR 200 million with integration costs of ~EUR 350–400 million over 24–36 months, an expectation that Q1 2026 net sales will fall somewhat more than the historical ~24% sequential seasonal decline, and FX assumptions around USD/EUR ~1.18 (c. EUR 50 million operating profit sensitivity per EUR 0.02 move, ~half hedged).Nokia Financial Statement Overview
Summary
Balance sheet and cash flow are supportive (manageable leverage and consistently positive FCF with solid conversion), but the operating picture is weaker: revenue has trended down over 2023–2025 and 2025 profitability compressed versus 2024, leaving low ROE and less consistent earnings quality.Income Statement
Revenue has trended down over the last three annual periods (2023–2025), including a ~5.2% decline in 2025, signaling a weak top-line trajectory. Profitability is mixed: gross margin remains solid (~42% in 2025), but operating and net profitability compressed sharply versus 2024 (net margin ~3.2% in 2025 vs ~6.6% in 2024). Earnings have been volatile over the cycle (large loss in 2020, unusually strong net margin in 2022, then normalization), which lowers confidence in consistency despite still-positive EBIT and net income in 2025.52
Neutral
Balance Sheet
Leverage looks manageable, with debt-to-equity consistently around ~0.23–0.26 in 2023–2025 (improved substantially from 2020’s higher leverage). Equity is sizable relative to the asset base, providing balance-sheet resilience. The key weakness is subdued shareholder returns recently: return on equity is low in 2025 (~2.9%) and down versus 2024 (~6.2%), indicating the company is not converting its capital base into profits as effectively as in stronger years (notably 2022).68
Positive
Cash Flow
Cash generation is a relative positive: operating cash flow and free cash flow are positive across all shown years, and 2025 free cash flow grew modestly (~2.4%). Cash conversion remains decent, with free cash flow at ~71% of net income in 2025 (and ~81% in 2024). Offsetting this, free cash flow stepped down from 2024 to 2025 (about 2.02B to 1.41B), and the provided cash-flow-to-sales-type coverage measure is consistently low (~0.20 range), suggesting cash generation is not especially strong relative to the business scale.64
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 19.10B | 19.22B | 21.14B | 24.91B | 22.20B |
| Gross Profit | 8.04B | 8.86B | 8.69B | 10.22B | 8.83B |
| EBITDA | 1.94B | 3.43B | 2.87B | 3.55B | 2.68B |
| Net Income | 604.18M | 1.28B | 665.00M | 4.25B | 1.62B |
Balance Sheet | |||||
| Total Assets | 37.58B | 39.15B | 39.86B | 42.94B | 40.05B |
| Cash, Cash Equivalents and Short-Term Investments | 6.42B | 8.91B | 8.24B | 9.16B | 9.60B |
| Total Debt | 5.21B | 4.75B | 5.19B | 5.52B | 5.66B |
| Total Liabilities | 16.53B | 18.40B | 19.23B | 21.52B | 22.59B |
| Stockholders Equity | 20.96B | 20.66B | 20.54B | 21.33B | 17.36B |
Cash Flow | |||||
| Free Cash Flow | 1.41B | 2.02B | 665.00M | 873.00M | 2.06B |
| Operating Cash Flow | 1.99B | 2.49B | 1.32B | 1.47B | 2.63B |
| Investing Cash Flow | -1.34B | -117.00M | 1.04B | -1.88B | -1.79B |
| Financing Cash Flow | -1.55B | -2.00B | -1.50B | -837.00M | -1.21B |
Nokia Technical Analysis
Positive
8.36
Price Trends
7.22
Positive
6.84
Positive
5.79
Positive
Market Momentum
0.34
Negative
62.63
Neutral
76.19
Neutral
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 8.36 is above the 20-day moving average (MA) of 7.94, above the 50-day MA of 7.22, and above the 200-day MA of 5.79, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 62.63 is Neutral, neither overbought nor oversold. The STOCH value of 76.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOK.
Nokia Risk Analysis
Nokia disclosed 34 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 1 New Risks
1.
We may be unable to realize the anticipated benefits, synergies, cost savings or efficiencies from acquisitions, and we may encounter issues or inefficiencies related to our organizational and operational structure including being unable to successfully implement related business plans. Q4, 2024
Nokia Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $77.41B | 29.58 | 103.24% | 1.18% | 6.17% | 35.41% | |
74 Outperform | $306.51B | 23.23 | 23.64% | 2.09% | 8.91% | 14.53% | |
74 Outperform | $47.50B | 35.83 | 120.56% | 0.49% | 36.77% | 102.83% | |
70 Outperform | $38.87B | 11.10 | 29.57% | 2.51% | 1.04% | ― | |
65 Neutral | $28.57B | 17.34 | -0.64% | 2.17% | 14.17% | -102.25% | |
63 Neutral | $46.96B | 49.36 | 4.38% | 2.26% | 5.05% | 115.92% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
NOK
Nokia
8.36
3.15
60.43%
CSCO
Cisco Systems
77.60
18.42
31.12%
ERIC
Telefonaktiebolaget LM Ericsson
11.47
3.41
42.38%
MSI
Motorola Solutions
467.28
48.46
11.57%
UI
Ubiquiti Networks
784.88
467.06
146.96%
HPE
Hewlett Packard Enterprise
21.53
5.73
36.27%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.