Nokia Corporation Sponsored American Depositary Shares (NOK)

FairStock Score: 31/100 — RISKY

Key Financials

Strengths

• Generates $499 million in annual free cash flow (0.9% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.21, providing financial flexibility
• Established organization with 78,005 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($3) with negative 210% margin of safety—limited downside protection
• Anemic revenue growth of 2.4% for a company of this size limits long-term upside

AI Analysis

Nokia Corporation Sponsored American Depositary Shares is a large-cap technology company valued at $57.7 billion. The business generates $19.9 billion in annual revenue with a 0.4% net margin and $499 million in free cash flow. From a quality standpoint, Nokia shows Altman Z-Score of 2.5 in the grey zone and modest 3% ROE. On valuation, the stock is commanding a steep 79.5x multiple, with trades far above its Graham Number ($3) with no margin of safety. Growth dynamics show revenue growing at 2.4% and profit growth of 245.8%. The 1.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 36/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $499 million in annual free cash flow (0.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 79x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Sluggish 2% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer