The company’s interest is focused on 6G network development, and the European Commission puts its trust in Nokia by letting them be in charge of mentioned research. The project is called “Hexa-X-II” where the last letters of the name stand for the second phase of the project. Although, Nokia is a telecommunications selling company, which is a growing and promising industry, the firm had a rough decade, as it has been struggling ever since smart phones were introduces, because before that Nokia was a beloved Finnish company selling the most reliable phones ever and to everyone. However, the company did not catch up with the phone selling business as it moved to smartphones, hence was forced to rebuild its business model from scratch. Nonetheless, the company is still standing and there may be a light at the end of the tunnel.
“We have had a strong first half and with our renewed competitiveness, we are well placed to deliver our full year 2022 guidance,” said Pekka Lundmark, President and CEO in Nokia on Q2 2022 presentation. Nokia delivered good profitability, which supports the full year outlook, as Pekka mentioned. The greatest impact on good results of the company has its Network Infrastructure product category, as it has a strong end-market demand, gaining 12% YoY. On the contrary, the greatest loss resided in Nokia Technologies, losing 25% YoY. On the other hand, this segment is potentially the most profitable, as it has 71.1% operational margin. Despite the supply chain and macroeconomics headwinds, Nokia demonstrated 8% growth in net sales year-over-year in Q2 2022 and continues to grow a strong customer base.
You may have miscellaneous feelings upon looking at the graph. “This doesn’t look attractive at all!” you may say. Well, as mentioned before, the company struggles for a long time. In spite of being in TOP 10 European tech companies by market cap, according to BCM, the stock price has been residing almost at the same level for more than 5 years straight. Neither uptrends, nor downtrends.
“Wait, what is that peak?” It is the last year’s candle from January 25, when Reddit community hyped the stock on discussion board, which afterwards gained over 38% in one day. And why it dropped back? Because it was extremely overvalued and it couldn’t be held for a long time.
Nokia is a Finnish multinational telecommunications and information technology company, established in 19th century. Nokia is listed on the Helsinki Stock Exchange and the New York Stock Exchange. You most probably might be very familiar with the brand itself, as Nokia maybe have been your very first experience with a mobile phone in your life.
BCM analyst team
Go backThe content of this material constitutes marketing communication and should not be considered as any type of investment advice and/or investment research and/or a solicitation for any transactions. This material was prepared for informational/educational purposes only and does not imply an obligation to perform investment transactions nor does it guarantee or predict future performance. BCM Begin Capital Markets Cy Ltd and its relevant persons including affiliates, agents, directors, or employees do not guarantee the accuracy, validity, timeliness, or completeness of any information/data provided by third parties and assume no liability for any loss arising from any investment made based on the said information/data. Past performance is no guarantee of future results.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 91.84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please read the Risk Disclosure.