Let’s talk about the popular Nokia Corporation (HLSE:NOKIA). The company’s shares saw a decent share price growth in the teens level on the HLSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Nokia’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Nokia
Is Nokia still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8% above my intrinsic value, which means if you buy Nokia today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is €4.55, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Nokia’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Nokia?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 94.71% over the next year, the near-term future seems bright for Nokia. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? NOKIA’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on NOKIA, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Nokia. You can find everything you need to know about Nokia in the latest infographic research report. If you are no longer interested in Nokia, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.