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Nokia Corporation Message Board

  • rrryahoo rrryahoo Sep 15, 2013 1:36 PM Flag

    How to Value the New Nokia. Please post your own valuation and method.


    Extrapolating out, could guess between $35B-$50B in next 12 months of sales for NSN. 10-15% margin ($3.5B to $7.5B in profits), talking roughly a $1-$2 per share in profits from NSN. About $1B in revenue from HERE/patents. So perhaps TOTAL between $4.5B to $8.5B in profits. 3.7B shares outstanding. So roughly $1.20-$2.30/share in earnings. Give it an industry multiple of 13X (13X future earnings for ERIC). Works out to about $15.60-$29.90/share. Alternatively, sum of parts valuation: NSN ($4.5B) + MSFT buyout money for D&S/patent license ($7.2B)+ ($5.7B cash) + HERE (est. ~$4B) + patents (est. ~$10B)= $31.4B= ~$8.50/share. So using those ROUGH calculations perhaps NOK stock could trade anywhere between $8.50 to $30 with almost zero downside. All credit ratings should be upgraded because there is ZERO debt and no handset division risk. Add in takeover speculation by Cisco you could add a bit for that and the upgrade cycle to 4G LTE worldwide. Since New Nokia will be both investment grade AND profitable provided the last couple of quarters of NSN momentum continues, the New Nokia's earnings deserve the multiple. As such, the former model is the better one to use. Please post your own valuation and how you arrive. Note: Do your own diligence, all of the above is merely speculation based on rough estimates and numbers. A decision to buy or sell should be based on your own risk tolerance and financial circumstances.

    Sentiment: Strong Buy

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