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Nokia’s (NOK) comeback has caught a lot of attention, especially after its strong fourth-quarter 2024 results. The Finnish telecom giant reported a 10% year-over-year jump in net sales for the quarter, thanks to growth in its Network Infrastructure and Nokia Technologies segments.
This is a big step forward after earlier struggles, including a 9% drop in full-year sales due to global economic challenges and reduced investments in key markets like India and North America.
The telecom industry presents a mixed-but-improving picture. Global smartphone shipments grew by 6.4% in 2024, showing pent-up demand for upgrades after years of decline. But on the flip side, telecom equipment makers faced slower demand as companies cut back on 5G investments amid economic uncertainty and rising costs. Even so, Nokia’s Q4 numbers show it’s finding its footing again, with an operating margin climbing to 19.1% from 15.3% last year and gross margins improving to 47.2%.
Looking at Nokia’s progress, it’s clear the company isn’t just stabilizing — it might be setting the stage for growth in 2025. With a dividend yield of 2.76% and strong prospects in Network Infrastructure and Cloud services, the big question now is: Is it time to invest in this dividend-paying stock? Let’s take a closer look.
Breaking Down Nokia’s Financial Performance
Nokia (NOK), a Finnish company with over 150 years of history, is a major player in telecommunications, offering everything from 5G networks to cloud services and technology licenses.
The past year has been a turning point for Nokia’s stock. Over the last 52 weeks, its shares are up nearly 27%.
So far in 2025, the stock is up 5.2%, hitting a recent high of $4.85 on Jan. 30.
Nokia’s Q4 2024 results highlight its improving financial health. Net sales for the quarter rose 10% year-over-year to 5.98 billion euros, thanks to strong performances in Network Infrastructure and Nokia Technologies. The gross margin climbed to 47.2%, its best since 2015, and its operating margin improved to 19.1%. Earnings per share (EPS) came in at 0.18 euros on a comparable basis, backed by a healthy cash position of 4.9 billion euros.
When it comes to valuation, Nokia looks like a bargain compared to its peers. Its forward price-earnings (P/E) ratio is 15.06x, well below the sector average of 30.55x, suggesting it could be undervalued given its growth potential. This makes Nokia an interesting choice for investors looking for value in the telecom space.
Key Growth Drivers Powering Nokia's Resurgence
Nokia’s comeback is being driven by smart partnerships and innovative projects that show its potential for growth. One key collaboration is with StarHub, one of Singapore’s largest telecom companies, to create network APIs for 5G and 4G applications. Using Nokia’s “Network as Code” platform, this partnership allows developers to build custom solutions for industries like banking, ports, and finance. By turning its network capabilities into revenue opportunities, Nokia is positioning itself as a leader in next-generation connectivity, which could open up new income streams and boost its competitive edge.
Another major growth driver is Nokia’s partnership with Openreach to build an open-access fiber network across the United Kingdom. This project, powered by Nokia’s One Network Platform, aims to connect 25 million homes and businesses by 2026 while cutting infrastructure costs and simplifying operations. These large-scale efforts not only reinforce Nokia’s role in critical infrastructure, but also highlight its ability to meet the growing demand for high-speed broadband.
On top of these growth initiatives, Nokia’s dividend adds extra appeal. With a forward yield of 2.76% and a payout ratio of 35.78%, the company offers an annual payout of $0.13 per share while leaving room for future increases.
These factors suggest that Nokia isn’t just stabilizing — it’s setting itself up for long-term success, making it an interesting option for investors looking for both growth and income.
Analyst Ratings and Nokia’s Future Roadmap
Nokia’s future looks cautiously optimistic as it works to build on its strong Q4 performance. For 2025, the company expects an operating profit between 1.9 billion euros and 2.4 billion euros, with free cash flow conversion ranging from 50% to 80%. This shows Nokia is trying to strike a balance — investing in growth while keeping its finances in check.
Analysts seem to have mixed but mostly positive views on Nokia. Out of 12 analysts, five rate it a “Strong Buy,” one suggests a “Moderate Buy,” three recommend holding, and three say “Strong Sell.” The average price target is $5.54, which is 17.87% higher than its current price as of Jan. 31.
Craig-Hallum is especially optimistic, recently raising its price target from $6 to $7 and maintaining a “Buy” rating after Nokia’s Q4 results beat expectations.
Not everyone is as confident, though. Goldman Sachs recently downgraded Nokia to “Sell” with a price target of $3.60, pointing to concerns about valuation after the stock’s recent climb. These differing opinions highlight the complexity of Nokia’s position. While its progress is clear, there are still questions about how far it can go from here.
Conclusion
Nokia’s impressive Q4 results and strategic growth initiatives signal a company on the mend, with improving profitability, exciting partnerships, and a solid dividend profile. While the stock offers reasonable valuations and potential upside based on analyst targets, its mixed ratings suggest some caution remains. For investors seeking a blend of stability, income, and long-term growth potential, Nokia’s resurgence might just make it a compelling dividend stock to watch.
