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A Look at Nokia’s Valuation

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Jul. 13 2017, Updated 10:37 a.m. ET

Inside Nokia’s price and valuation multiples

Nokia’s (NOK) current book value per share of ~$3.6 compares with its expected book value per share of ~$3.6. Nokia stock is trading at a price-to-book value of ~1.6x.

In comparison, peer companies Apple (AAPL), GoPro (GPRO), NetApp (NTAP), and Seagate Technology (STX) have current book values per share of ~$25.7, $2.6, ~$10.3, and ~$5.4, respectively.

Nokia’s price-to-sales ratio is ~1.4x, on par with its estimated price-to-sales ratio of ~1.4x.

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A look at Nokia’s EBITDA numbers

Nokia’s EBITDA (earnings before interest, tax, depreciation, and amortization) fell 10% to $1.1 billion in 2016. Analysts expect the company to post EBITDA of $3.4 billion in 2017. Nokia’s shares are changing hands at a price-to-EBITDA ratio of 31.1x.

Peer companies Apple, GoPro, NetApp, and Seagate Technology are trading at price-to-EBITDA ratios of 10.9x, -4.1x, 11.2x, and 5.8x, respectively.

Market capitalization

On July 10, 2017, Nokia was the second-largest hardware player in terms of market capitalization globally at ~$37.2 billion. In comparison, Apple had a market cap of ~$764 billion, GoPro had a market cap of ~$1.1 billion, NetApp had a market cap of ~$10.6 billion, and Seagate had a market cap of ~$11.7 billion on the day.

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What amount of debt is Nokia carrying?

Nokia is carrying total debt of $4.9 billion, which reflects the sum of its short-term debt of $0.5 billion and its long-term debt of $4.4 billion. The company has total capital of $26.5 billion, so its total debt-to-total capital ratio is 18%.

If we consider the company’s debt in relation to it assets, equity, and EBITDA, we’ll find that its debt-to-assets, debt-to-equity, and debt-to-EBITDA ratios are 0.10x, 23.7x, and 4.2x, respectively.

Nokia’s credit rating

Moody’s rating on Nokia’s debt is WR (withdrawn rating). The company also has an S&P debt rating of BB+ and a debt outlook of “stable.”

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