Stock Groups

Tailwind from Intensified 5G Deployments By TipRanks

[ad_1]

© Reuters. Nokia Stock: Tailwind from Intensified 5G Deployments

Nokia (NYSE:) touts a year-to-date price increase of 45%, but I remain bullish on the stock. However, its forward P/E remains at 18.3x.  

Nokia, a Finnish company that is involved in the $114 billion wireless network industry, is Nokia. The company currently has more than 100 5G agreements and 160 5G engagement contract.

Its 5G wireless network solutions, and fiber-to-the-home fixed broadband services could boost NOK’s YTD gain to over 50%. (See Nokia stock charts on TipRanks)

Surge in 5G Infrastructure

Government mandates are compelling telecom companies to upgrade their 4G cell sites to 5G. Government licenses are required for both fixed broadband and wireless companies.

In the Philippines, politicians can force companies such as Globe Telecom and PLDT Inc. to increase their 5G network infrastructure. Other countries’ politicians can do the same.

The rising deployment of 5G networks could improve Nokia’s TTM revenue of $26.4 billion. Nokia’s quarterly net income could rise to over $500 million if it signs more 5G contracts.

Nokia’s FTTH business also benefits from $15.3-billion in fibre-to-the home Internet market.

Huawei still on U.S. Blacklist

Nokia’s estimated forward revenue CAGR is only 0.8%. This could significantly improve if Huawei remains forever in President Joe Biden’s list of blacklisted companies. North American and European governments are banning Huawei’s network hardware and replacing it with their own.

Nokia is only required to compete against Juniper Networks NYSE:, Ericsson BS:) (ERIC) and Arista NET (ANET) for 5G contracts in North America, Europe and other U.S.-allied nations.

Nokia will have less competition to secure a larger share of $80.5 billion 5G infrastructure market.

Wall Street’s Take

The consensus among Wall Street analysts is that Nokia is a Moderate Buy, based on seven Buys and three Holds. This implies a 29.7% upside potential.

Conclusion

The relative undervaluation of Nokia makes it an intriguing investment. The company’s expertise in fiber-to the-home broadband and 5G wireless infrastructure is helping it to return to profitability.

Nokia has a large number patents that give it an advantage against Arista and Ericsson.

Disclosure: Motek Moyen didn’t hold any positions in the securities discussed in this article at the time it was published.

​Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks does not warrant the accuracy, reliability or completeness of this information. This article is not intended to be interpreted as an offer or recommendation for the purchase or sale of securities. This article is not intended to provide advice on legal, professional investment or financial matters. TipRanks, its affiliates, disclaim any liability or responsibility in relation to the content. You are responsible for your actions based upon the articles. TipRanks and its affiliates do not endorse or recommend this link. The past performance of TipRanks or its affiliates is not an indication of future prices, results, or performances.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs include futures, stocks, indexes and Forex. Prices are provided not by the exchanges. They are generated by market makers. Therefore, prices can be inaccurate and differ from actual market prices. These prices should not be used for trading. Fusion Media does not accept any liability for trade losses you may incur due to the use of these data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. You should be aware of all the potential risks and expenses associated with trading in the financial market. It is among the most dangerous investment types.



[ad_2]