For most of the last year, Nokia (NYSE:NOK) traded in a holding batter at $4.00. Why is the stock stuck? Speculators thought a short-squeeze in January would send the stock to an uptrend. But with too many shares outstanding, the telecoms equipment supplier will need to post improved operating margins and revenue growth.
Nokia has a strong rebound potential. It needs to grow its market share in the 5G network equipment. In March, the company announced a 5-year deal to supply C-Band spectrum for AT&T. Instead of rallying, NOK stock moved nowhere. Conversely, after it lost business to Samsung (SSNLF) on the Verizon (NYSE:VZ) supply contract, the stock fell last year.
Last week, Nokia settled with Lenovo (LNVGY) in a patent dispute. The firms agreed on a cross-licensing agreement. Jenni Lukander, President of Nokia Technologies, said the deal will bring innovation for users worldwide.
Last week, Nokia announced yet another promising deal for 5G. DISH will use Nokia’s NetGuard solution to secure its Open RAN-based 5G wireless network.
Nokia is suitable for value investors willing to hold the stock for at least one to three years. Eventually, the stock will build an uptrend. It needs margin growth posted each quarter to support a higher share price.
