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Nokia (NOK)
:NOK

Nokia (NOK) AI Stock Analysis

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NO

Nokia

(NYSE:NOK)

Rating:64Neutral
Price Target:
Nokia's overall score reflects a blend of financial stability, technical neutrality, and valuation concerns. Strong cash flows and a robust balance sheet are offset by revenue volatility and valuation challenges. Earnings call insights highlight growth potential in strategic areas but also reveal profitability hurdles due to unforeseen charges and external factors like tariffs.

Nokia (NOK) vs. SPDR S&P 500 ETF (SPY)

Nokia Business Overview & Revenue Model

Company DescriptionNokia Corporation is a global leader in telecommunications, information technology, and consumer electronics. Headquartered in Espoo, Finland, Nokia is primarily engaged in providing network infrastructure, technology services, and licensing of its technology and patents. The company's core products and services include mobile network equipment, fixed network solutions, and technologies for Internet of Things (IoT), cloud services, and 5G infrastructure. Nokia serves a wide range of customers, including telecommunications service providers, enterprises, and public sector agencies across the globe.
How the Company Makes MoneyNokia generates revenue through several key streams. A significant portion of its income comes from its Networks business, which involves selling equipment and services for wireless and fixed-line networks. This includes 4G and 5G infrastructure, IP routing, optical networks, and software solutions. The company's Technologies segment earns money by licensing its extensive portfolio of patents and technologies to other companies, particularly in the mobile device and consumer electronics sectors. Moreover, Nokia has strategic partnerships with various technology and telecommunications companies to enhance its service offerings and expand its market reach. These partnerships, along with continuous investments in research and development, help Nokia maintain its competitive edge and drive revenue growth.

Nokia Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q1-2025)
|
% Change Since: 3.04%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong growth in network infrastructure and cloud services, positive cash flow, and strategic progress with the Infinera acquisition. However, the decline in net sales, significant one-off charges, tariff impacts, and challenges in achieving profit targets offset these gains.
Q1-2025 Updates
Positive Updates
Strong Growth in Network Infrastructure
Network infrastructure segment showed 11% growth, with optical networks growing 15%, fixed networks 9%, and IP networks 7%.
Cloud and Network Services Expansion
Cloud and Network Services grew 8% with strong demand for 5G core, securing significant wins at AT&T, Boost Mobile, Ooredoo Qatar, and Telefonica.
Positive Free Cash Flow
Generated over EUR 700 million of free cash flow in the quarter, ending with a net cash position of EUR 3 billion.
Infinera Acquisition Value
Infinera acquisition is expected to accelerate product roadmaps and increase access to hyperscale customers, with strong order growth in optical networks.
T-Mobile RAN Agreement Extension
Announced an extension of the RAN agreement with T-Mobile U.S., indicating strong partnership and potential for future growth.
Negative Updates
Decline in Net Sales
Net sales declined 3% year-over-year, largely due to a challenging comparison in Nokia Technologies, which declined 52%.
Impact of One-Off Charges
Operating margin in mobile networks was negatively impacted by a EUR 120 million one-off contract settlement charge.
Tariff Impact on Operating Profit
Potential tariffs could have a EUR 20 million to EUR 30 million impact on operating profit in Q2, with no assumption made for the second half of 2025.
Lower Gross Margin
Gross margin decreased by 820 basis points to 42.3%, mainly due to lower Nokia Technologies net sales and one-off charges.
Challenges in Achieving Profit Targets
Given unexpected charges, it will be more challenging to achieve the top end of the operating profit range for 2025.
Company Guidance
In the recent Nokia First Quarter 2025 Results Call, several key metrics were discussed, highlighting both challenges and successes. Nokia's net sales declined by 3% year-over-year, but when adjusted for over EUR 400 million of catch-up net sales in Nokia Technologies, they actually grew by 7%. Network infrastructure saw an 11% growth, with optical networks particularly strong at 15%. Cloud and Network Services grew 8% due to high demand for 5G core. Despite a contraction in net sales, Mobile Networks showed stabilization with a 2% increase. Operating margins saw varied performance across segments, with network infrastructure expanding by 190 basis points and cloud and network services seeing a substantial increase of 930 basis points. Free cash flow was robust at over EUR 700 million, ending the quarter with a net cash position of EUR 3 billion. However, profitability was impacted by a EUR 120 million contract settlement in Mobile Networks. Looking forward, Nokia expects tariffs to potentially impact operating profit by EUR 20 million to EUR 30 million in Q2, with proactive measures being taken to mitigate exposure. The guidance remains unchanged, although achieving the top end of the operating profit range is now seen as more challenging due to unexpected charges.

Nokia Financial Statement Overview

Summary
Nokia presents a mixed financial picture with solid cash flow performance and a strong balance sheet offset by revenue volatility. The company has demonstrated improved profitability margins and effective cost management. Despite challenges in revenue growth, Nokia maintains financial resilience through strong cash generation and reduced leverage.
Income Statement
65
Positive
Nokia's revenue has shown volatility, with a notable drop from 2022 to 2024. However, gross profit margins remain relatively stable, indicating consistent cost management. The net profit margin improved significantly from 2023 to 2024, reflecting better profitability despite lower revenues. The EBIT and EBITDA margins are satisfactory, indicating operational efficiency.
Balance Sheet
70
Positive
The balance sheet illustrates a strong equity position with an equity ratio of around 52.8% in 2024. The debt-to-equity ratio has improved, showing reduced leverage. Return on equity has increased, reflecting improved profitability relative to shareholder investments. Overall, the balance sheet reflects financial stability and effective debt management.
Cash Flow
75
Positive
Operating cash flow has significantly improved in 2024, showcasing robust cash generation capabilities. Free cash flow has grown impressively, indicating effective capital expenditure management. The operating cash flow to net income ratio is strong, suggesting efficient conversion of income into cash.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
8.86B19.22B22.26B24.91B22.20B21.87B
Gross Profit
3.75B8.86B8.69B10.22B8.83B8.21B
EBIT
327.00M2.00B1.66B2.32B2.16B918.00M
EBITDA
859.00M3.43B2.94B3.55B3.23B2.05B
Net Income Common Stockholders
-204.00M1.28B665.00M4.25B1.62B-2.42B
Balance SheetCash, Cash Equivalents and Short-Term Investments
7.22B8.91B8.24B9.16B9.60B8.28B
Total Assets
39.26B39.15B39.86B42.94B40.05B36.28B
Total Debt
5.07B4.75B5.19B5.52B5.66B6.49B
Net Debt
-478.00M-1.87B-1.05B52.00M-1.03B-454.00M
Total Liabilities
18.44B18.40B19.23B21.52B22.59B23.65B
Stockholders Equity
20.73B20.66B20.54B21.33B17.36B12.56B
Cash FlowFree Cash Flow
1.11B2.02B665.00M873.00M2.07B1.28B
Operating Cash Flow
1.38B2.49B1.32B1.47B2.63B1.76B
Investing Cash Flow
-354.00M-117.00M1.04B-1.88B-1.79B-1.52B
Financing Cash Flow
-1.72B-2.00B-1.50B-837.00M-1.21B883.00M

Nokia Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.43
Price Trends
50DMA
5.12
Positive
100DMA
5.01
Positive
200DMA
4.68
Positive
Market Momentum
MACD
0.08
Negative
RSI
61.91
Neutral
STOCH
79.31
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 5.43 is above the 20-day moving average (MA) of 5.30, above the 50-day MA of 5.12, and above the 200-day MA of 4.68, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 61.91 is Neutral, neither overbought nor oversold. The STOCH value of 79.31 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 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 (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
MSMSI
73
Outperform
$69.76B34.86189.18%0.99%7.45%46.78%
HPHPE
72
Outperform
$23.76B18.716.39%2.87%11.63%-24.41%
70
Outperform
$10.28B100.933.71%2.86%-29.92%
68
Neutral
$28.71B181.881.67%2.11%-2.08%
67
Neutral
$12.00B34.317.58%2.45%-2.56%52.05%
NONOK
64
Neutral
$28.33B36.075.70%1.89%-9.96%-6.83%
62
Neutral
$11.80B10.31-7.45%2.91%7.43%-7.78%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NOK
Nokia
5.43
1.72
46.36%
CIEN
Ciena
72.46
26.54
57.80%
JNPR
Juniper Networks
35.76
1.15
3.32%
ERIC
Telefonaktiebolaget LM Ericsson
8.49
2.60
44.14%
MSI
Motorola Solutions
412.77
39.54
10.59%
HPE
Hewlett Packard Enterprise
18.31
-1.69
-8.45%
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.