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View the full Nov 12, 2026 version

Price: $8.44
Discount category: Close to intrinsic value
Next earnings: Jan 28, 2027
Next earnings is estimate: No
Company name: added: Nokia
Sector: added: Optical and IP networking equipment
About: added: Nokia Corporation (Nokia) is a Finnish maker of network equipment, based in Espoo. It has three segments. Network Infrastructure sells IP and optical network products, including for AI and cloud customers. Mobile Infrastructure sells network products to mobile operators. Portfolio Businesses holds smaller businesses that Nokia is selling. Nokia bought Infinera, an optical maker, in February 2025 and expects to finish the integration by the end of 2026. Net sales were EUR 5,154 million in Q3 2026 and EUR 14,402 million in the first nine months. Comparable operating profit was EUR 1,340 million for the nine months. Net sales to AI and cloud customers grew 123% in Q3 2026. Nokia reports in euros. Its shares trade on Nasdaq Helsinki, and its American depositary shares (ADS) trade on the New York Stock Exchange as NOK. Each ADS represents one ordinary share, and Citibank is the depositary (Form 20-F for 2025). Nokia files an annual report on Form 20-F and quarterly reports on Form 6-K, not Form 10-Q. At September 30, 2026, Nokia had 5,742,239,696 shares, of which it held 83,304,077. Justin Hotard is President and Chief Executive Officer.
Thesis: added: The market prices Nokia as an equipment maker with two different businesses. Network Infrastructure grows fast on AI and cloud demand, with IP Networks up 43% and Optical Networks up 18% in Q3 2026. Mobile Infrastructure grows slowly in a market with strong competition. Investors doubt that the fast growth turns into steady profit and cash, because free cash flow was negative EUR 205 million in the first nine months of 2026, Nokia invests EUR 400 million more in working capital to secure supply, and restructuring charges rose to EUR 1,100 million. For the value to show, three things must be true. Optical and IP Networks must grow by 25% to 30% in 2027, as Nokia expects. Comparable operating margin must keep rising as the Infinera integration ends, with EUR 200 million of net synergies, and as restructuring programs cut cost. And free cash flow conversion must rise from the 35% to 55% of comparable operating profit that Nokia now expects for 2026. The Q4 and full-year 2026 report on January 28, 2027 and the orders of the next quarters are the next tests.
Risks: added: Growth now depends on AI and cloud customers, which grew 123% in Q3 2026. These are large buyers whose orders can change fast, and Nokia carries more inventory and receivables to serve them. A pause in their spending would cut sales and leave Nokia with extra working capital. Cash conversion is low. Free cash flow was negative EUR 205 million in the first nine months of 2026, and Nokia expects only 35% to 55% of comparable operating profit to turn into cash this year. Restructuring cash outflows are EUR 800 million to EUR 900 million. Mobile Infrastructure faces strong competition, and Nokia said part of its Q3 2026 sales came from Q4. A weaker fourth quarter in this segment would lower profit. Nokia reports in euros, and the ADS trades in dollars. Its 2026 outlook assumes EUR 1 equals USD 1.14, and a stronger dollar lowers reported profit from dollar sales. Parts and chips may also cost more or run short. Nokia is selling its Portfolio Businesses, and two sales are done or agreed. Delays, losses on sales or stakes in other companies, such as Inseego, can add cost or change results.
Balance sheet: added: Nokia had net cash and interest-bearing financial investments of EUR 2,584 million at September 30, 2026, down EUR 794 million in nine months. Total cash and interest-bearing investments were EUR 5,023 million. Long-term interest-bearing liabilities were EUR 1,865 million and short-term ones were EUR 574 million. Lease liabilities of EUR 739 million long-term and EUR 196 million short-term are not in net cash. In June 2026 Nokia replaced EUR 500 million of notes due in 2028 with new notes due in 2032. Defined benefit pension assets were EUR 6,817 million and pension liabilities were EUR 1,839 million. Total equity was EUR 21,333 million, or EUR 3.75 per share for shareholders. Free cash flow was negative EUR 99 million in Q3 and negative EUR 205 million in nine months. Nokia expects capital expenditure of EUR 750 million to EUR 850 million in 2026. There were 5,658,936 thousand shares outside treasury at September 30, 2026, and Nokia held 80,314,659 own shares after the transfer of November 9, 2026. As of Sep 30, 2026.
Checkpoints: added: Oct 22, 2026: Q3 2026 results: AI and cloud growth and margin. Passed. Watch: Network Infrastructure growth of 10% or more at constant currency with a higher comparable operating margin than last year passes; lower growth or a lower margin fails. Outcome: Network Infrastructure grew 15% at constant currency, and the comparable operating margin rose by 220 basis points to 11.7%. Jan 28, 2027: Q4 and full-year 2026 results. Pending. Watch: Comparable operating profit of EUR 2.1 billion to EUR 2.6 billion for 2026, above the mid-point, and free cash flow conversion of 35% or more pass; a result below the range or lower conversion fails. 2027 (estimate): 2027 growth of Optical and IP Networks. Pending. Watch: Combined Optical and IP Networks growth of 25% or more in 2027 with the comparable operating margin above 2026 passes; slower growth fails.
Recent events: added: Oct 22, 2026: Nokia reported Q3 2026 results. Net sales were EUR 5,154 million, up 10% (9% at constant currency). Comparable operating profit rose 35% to EUR 605 million, a margin of 11.7%, and comparable diluted EPS from continuing operations was EUR 0.09. Reported operating profit was EUR 196 million because of EUR 357 million of restructuring charges. Net sales to AI and cloud customers grew 123%, and orders grew 118%. Free cash flow was negative EUR 99 million. Oct 22, 2026: Nokia kept its 2026 outlook for comparable operating profit of EUR 2.1 billion to EUR 2.6 billion and said it expects a result above the mid-point. It raised its assumption for comparable financial income to EUR 300 million to EUR 400 million, lowered its free cash flow conversion assumption to 35% to 55%, and raised restructuring charges to EUR 1,100 million. It expects Optical and IP Networks to grow 25% to 30% in 2027. Oct 22, 2026: Nokia's Board decided a dividend of EUR 0.03 per share, with a record date of October 27 and payment on November 5, 2026. This leaves EUR 0.03 per share of the authorization for 2025 distributions. Oct 13, 2026: Nokia agreed to sell its Enterprise Campus Edge business to AURELIUS. The sale is expected to close in the first half of 2027, and Nokia shows the business as a discontinued operation. Oct 1, 2026: Nokia completed the sale of its Fixed Wireless Access CPE business to Inseego. Nokia invested USD 10 million in cash and received about 1.9 million Inseego shares, about 11% of the company, and warrants for about 0.8 million more shares. Jun 5, 2026: Nokia issued EUR 500 million of 3.625% senior notes due June 2032. It used the money to repay its EUR 500 million of 3.125% notes due May 2028.