Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- Nokia Oyj
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D . The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Communications Equipment industry. The net income has significantly decreased by 1351.1% when compared to the same quarter one year ago, falling from -$88.88 million to -$1,289.72 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Communications Equipment industry and the overall market, NOKIA CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for NOKIA CORP is currently lower than what is desirable, coming in at 31.60%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -13.50% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to -$560.70 million or 147.38% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 58.67%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 1033.33% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
Nokia Corporation provides telecommunications infrastructure hardware, software, and services worldwide. The company offers smart phones and smart devices; and feature phones, and related services and applications. Nokia Oyj has a market cap of $10.28 billion and is part of the technology sector and telecommunications industry. Shares are down 42.5% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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