NEW YORK (TheStreet) -- Shares of Nokia (NOK) are rising 2.95% to $7.34 in Thursday's afternoon trading as many companies are reportedly teaming up to bid for Nokia's HERE mapping unit. Nokia announced last month that it was looking to sell the division.
Uber Technologies is joining China's largest search engine Baidu Technologies (BIDU) and Apax Partners to pursue Nokia's HERE, sources told Bloomberg.
Another group, comprising China's Tencent Holdings (TCEHY), NavInfo and Swedish buyout firm EQT Partners AB, is also bidding for the unit, Bloomberg sources added.
Similarly, Germany's premium automakers Daimler AG (DDAIF), Volkswagen's (VLKAY) Audi and BMW have also teamed up with private equity firm General Atlantic to raise their chances of getting Nokia's map unit, according to Reuters.
"HERE is an attractive asset because only HERE and Google own high-quality and constantly upgraded digital maps that can form part of a software ecosystem," Mikael Rautanen, an analyst with the research firm Inderes, told The Wall Street Journal.
He added that HERE's strength is in the automotive sector, as about 13 million new cars in North America and Europe last year used the maps in their built-in navigation system.
HERE is Nokia's map business unit that captures content such as road networks, buildings, parks and traffic patterns. The map unit supplies digital mapping software to car navigation systems and to portable devices such as smartphones users so they can navigate easily. Currently, the apps are available on the Android, iOS, Windows, Firefox OS, Fire OS, and Sailfish OS.
When HERE first debuted at the end of 2014, it almost gave Google's (GOOGL) Google Maps a run for its money, Engadget reported. The biggest difference though, between Google Maps and HERE, is that users on HERE can navigate even when they're offline.
TheStreet Ratings team rates NOKIA CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NOKIA CORP (NOK) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, notable return on equity, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Communications Equipment industry. The net income increased by 157.7% when compared to the same quarter one year prior, rising from -$329.27 million to $190.12 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, NOKIA CORP's return on equity exceeds that of both the industry average and the S&P 500.
- Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that NOK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.51 is high and demonstrates strong liquidity.
- NOKIA CORP has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, NOKIA CORP increased its bottom line by earning $0.37 versus $0.06 in the prior year. For the next year, the market is expecting a contraction of 13.5% in earnings ($0.32 versus $0.37).
- You can view the full analysis from the report here: NOK Ratings Report