Why This Tech Giant Should Be on Investor Radars

Nokia is looking to completely revamp its business in a three-phase plan

Dec 11, 2020 at 12:13 PM
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Nokia Corporation (NYSE:NOK) is a global technology company headquartered in Espoo, Finland. The tech company offers a portfolio of network equipment, software, services and licensing opportunities. Just about a decade ago, NOK was one of the world’s top cell phone manufacturers but has since been overtaken by Apple (AAPL) and Samsung.

Today, Nokia is working to revamp its entire business approach with a three-prong plan. On Oct. 29, Nokia announced the first phase of its plan by sharing a new operating model designed to better position Nokia for ever-changing market and align itself better with customer needs. The second phase of Nokia’s plan is scheduled to be released to investors next week, on December 16.

So far in 2020, Nokia stock has increased 6%. Back in March of this year, Nokia stock reached a 52-week low of $2.34, but has since recovered by nearly 80%. Nokia stock price is currently down 22% from its 52-week high of $5.14.

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Nokia stock has been 50/50 compared to Wall Street's earnings expectations over the past 12 months. In the final quarter of 2019, Nokia stock beat expectations by $0.03, reporting an earnings per share (EPS) of $0.17. In first quarter of 2020, Nokia stock matched estimates with its EPS of $0.01. Nokia stock increased its EPS in the second quarter, reporting an EPS of $0.07 and beating expectations by a margin of $0.04. In the third quarter, Nokia stock failed to meet expectations, reporting an EPS of $0.06 and missing expectation by $0.01, 14%. Wall Street expects Nokia’s EPS to jump up to $0.13 for the final quarter of 2020.

Meanwhile, in the options pits, calls have been popular over the last two weeks. This is per NOK's 10-day call/put volume ratio of 41.64 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 81% of readings in its annual range. This indicates a much healthier-than-usual appetite for long calls of late. Echoing this, short-term players have rarely been more call-heavy. The stock's Schaeffer's open interest ratio (SOIR) of 0.17 sits in the 15th percentile of its annual range.

From a fundamental perspective, Nokia stock is showing promising signs to potential investors. The company’s income statement has shown a positive change in net income over the last three years. Investors should keep a close eye on the company as details Nokia’s future commitments continue to be released.

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