Nokia Oyj (NOK, Financial) has recently witnessed a notable uptick in its stock performance, with a market capitalization now standing at $20.38 billion. The current price of the stock is $3.69, reflecting an 11.30% gain over the past week and a 10.60% gain over the past three months. When compared to the GF Value of $4.86, Nokia's stock is currently considered modestly undervalued, a consistent assessment with its past GF Value of $4.78. This valuation suggests that investors may have an opportunity to engage with a stock that has potential for growth.
Understanding Nokia Oyj's Business
Nokia Oyj, a stalwart in the hardware industry, is a global provider of telecom equipment and services. The company's operations are divided into four key segments, with the mobile networks segment being the largest. This segment focuses on selling equipment and services to telecom carriers for public wireless networks. The network infrastructure segment is another significant part of Nokia's business, concentrating on fixed networks, including IP, optical, and submarine networks. The cloud and network services segment is emerging, targeting enterprises with as-a-service platforms. Additionally, Nokia has a significant research division and patent business, licensing technology to various firms in the electronics and Internet of Things sectors. 
Profitability Analysis
Nokia's Profitability Rank stands at 5/10, indicating a moderate level of profitability within the industry. The company's operating margin is 6.74%, which is better than 65.87% of companies in the same sector. Its return on equity (ROE) is 3.15%, surpassing 43.33% of its peers, while the return on assets (ROA) at 1.61% and return on invested capital (ROIC) at 2.34% are also competitive. Over the past decade, Nokia has managed to be profitable for six years, which is better than 37.35% of the companies in the industry. 
Growth Prospects and Challenges
The Growth Rank for Nokia is also positioned at 5/10. The company has experienced a 3-year revenue growth rate per share of 0.80% and a 5-year rate of 0.40%, both of which are modest but better than over 41% of the companies in the industry. However, the estimated total revenue growth rate for the next 3 to 5 years is projected at -0.60%, and the EPS without NRI growth rate is expected to decline by -9.49%. These figures suggest that Nokia may face challenges in maintaining its revenue and earnings growth in the near future. 
Top Shareholders in Nokia
Among the notable shareholders of Nokia, Richard Pzena (Trades, Portfolio) stands out with a significant holding of 52,313,442 shares, representing 0.95% of the company. Jim Simons (Trades, Portfolio) follows with 599,400 shares, and Jeff Auxier (Trades, Portfolio) holds a smaller stake of 12,947 shares. These investors' commitment to Nokia underscores their belief in the company's value proposition and potential for future growth.
Competitive Landscape
When compared to its competitors, Nokia holds a substantial market cap advantage. Bittium Corp (OHEL:BITTI, Financial) has a market cap of $228.708 million, and Teleste Oyj (OHEL:TLT1V, Financial) is valued at $53.756 million. In contrast, Cisco Systems Inc (CSCO, Financial), a major player in the industry, boasts a market cap of $195.23 billion, reflecting the diverse range of company sizes within the hardware sector.
Conclusive Insights
In conclusion, Nokia Oyj's recent stock performance has been impressive, with the company's valuation remaining modestly undervalued according to the GF Value. The analysis of Nokia's profitability and growth, in the context of the industry, reveals a company with solid fundamentals but facing potential headwinds in future revenue and earnings growth. The significant shareholders' stakes in the company demonstrate confidence in its long-term prospects. Finally, when compared to its competitors, Nokia's market position is strong, yet it operates in a highly competitive environment that will require continuous innovation and strategic planning to maintain its edge.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
