The tech-heavy Nasdaq Composite sank 2.6% on May 10 as investors’ rotation away from tech stocks to cyclical stocks continued. However, several tech giants reported impressive results for the last quarter.
Given the financial strength of the tech companies and the rising demand for technology products and solutions from several industries as part of their accelerated digital transformation, we think the down phase for the technology stocks should be short lived.
Widespread adoption of 5G, IoT, and AI should keep the industry growing. So, it is wise to bet on Nokia Corporation (NOK) and EchoStar Corporation (SATS), which have delivered solid returns lately and are well positioned to keep gaining.
Nokia Corporation (NOK)
Headquartered in Espoo, Finland, NOK is engaged in the network and Internet protocol (IP) infrastructure, software, and related services market. The company operates through four segments: Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies.
For its fiscal first quarter ended March 31, NOK’s revenue was $5.10 billion, which represents a 3.3% year-over-year increase. Its income from operations for the quarter came in at $431 million, up 667.1% from the prior-year quarter. The company’s net profit was $263 million, which represents a 328.7% year-over-year rise. Its EPS increased 350% year-over-year to $0.05.
Analysts expect its EPS to be $0.30 in its fiscal year 2022, which represents a 3.4% year-over-year increase. NOK surpassed consensus EPS estimates in three of the trailing four quarters. The company’s revenue is expected to increase 4% year-over-year to $25.92 billion in its fiscal year 2021.
NOK announced on May 10 that Telefónica’s Latin America brand, Movistar Chile, selected it to provide equipment from its AirScale portfolio to launch the operator’s 5G network in the country. This is expected to increase the company’s market dominance in the country and grow its consumer base there. The stock has soared 27.4% year-to-date to close yesterday’s trading session at $4.98. It has gained 6.7% this month.
NOK’s POWR Ratings are consistent with its performance. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value, Growth and Sentiment. Click here to access NOK’s ratings for Momentum, Quality and Stability.
NOK is ranked #12 of 55 stocks in the B-rated Technology- Communication/Networking industry.
EchoStar Corporation (SATS)
Together with its subsidiaries, SATS provides broadband satellite technologies and broadband Internet services. The company operates through two segments: Hughes and EchoStar Satellite Services (ESS).
SATS’ revenue for the first quarter ended March 31 increased 36.3% year-over-year to $482.60 million. Its adjusted EBITDA came in at $185.74 million for the quarter, which represents an 25% year-over-year increase. SATS’ net income came in at $77.60 million, up 234.4% year-over-year.
SATS’ $0.03 consensus EPS estimate for quarter ending June 30 represents a 125% year-over-year increase. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The company’s revenue is expected to increase 10.8% from the same period last year to $484 million for the quarter ending June 30, 2021.
In collaboration with OneWeb, SATS announced on May 5that the U.S. Air Force Research Lab (AFRL) selected the two companies display their managed LEO satellite communication (SATCOM) services. This is expected to increase its revenue. SATS has gained 11.3% so far this month to close yesterday’s trading session at $27.30.
SATS’ solid prospects are apparent in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. It has a B grade for Growth, Value and Momentum as well. Click here to see SATS’ ratings for Stability, Sentiment and Quality.
SATS is ranked #24 of 45 stocks in the B-rated Technology-Electronics industry.
NOK shares were trading at $4.92 per share on Tuesday afternoon, down $0.06 (-1.20%). Year-to-date, NOK has gained 25.83%, versus a 10.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Ananyo Guha Niyogi
Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand.
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