Nokia (NOK Stock Report) used to be the largest mobile operator in the past. Recently the company saw a possible turnaround in its spiraling business. It came in the form of a rise in its Q2 profits reported on Thursday. Nokia stock price also spiked by over 10% last week. The company managed to beat forecasts in spite of the slow start to the year and a weak first-half.
This was all thanks to the heavy demand for 5G. With the advent of a seemingly new technology, do these results point to a new opportunity to look for tech stocks to buy?
Novel Business Models Suggest New Options For Tech Stock Investors
Typically with technology stocks, new trends like 5G could open minds to more opportunities. Take delivery technology, for instance. It’s no longer about going to a physical location and putting in a request to send a package. Now, applications are taking the place of these brick and mortar outlets.
Let’s take a look at one small cap delivery stock to watch during the second half of the year. ParcelPal (PTNYF) (PKG) created an on-demand marketplace where customers can shop for anything from food to clothes. There is no more waiting in line for lunch or rushing to the store after work to grab your clothes.
With ParcelPal on-demand, customers simply shop from the app, choose the items they want, and pay. But this is where the similarities between this company and other on-demand delivery companies ends. Something that is beginning to set ParcelPal (PTNYF) (PKG) apart from its immediate competition is its diversification strategy. Not only is the company working with the likes of Amazon, but also entering key verticals. Right now, ParcelPal has built relationships with businesses in both alcohol and cannabis.
As the marijuana industry evolves, new opportunities have come about. One of the bigger deals closed in 2019 was between ParcelPal (PTNYF) (PKG) and Yield Growth! The deals form an alliance between the two companies for same-day and on-demand delivery, sale, of hemp-based cosmetics. These come from Yield Growth’s subsidiary, Urban Juve in Canada.
The New Market Reach Could Be Unparalleled
Over 90 locations sell Urban Juve hemp products. This includes well known pharmacy chains across North America. It also focuses on a plan to expand that to 130 retail outlets in the near future.
Customers will be able to track their purchase in real time and have their product delivered to any location they specify. As time and regulations allow, ParcelPal’s cannabis network will continue to grow, with the goal of capturing a major piece of Canada’s $5.2 B legal cannabis market…and this is just one example of how technology is taking new forms within the industry.
Back In Focus: Could Expansion Plans Point To A Higher Nokia Stock Price?
Rajeev Suri, the CEO of the company claimed the market to be strong in leading 5G market countries. That includes the US and Korea. Suri explained that the company would soon venture into additional markets. Japan, the Middle East, China, the Nordics, Italy and UK are on target before the end of 2019. Nokia has already bagged 45 commercial deals for 5G networks along with 9 live networks.
The company, however, faces some uncertainties when concerned with trade and challenges in the Chinese market as well. This coupled with the increasing pressure of investment to secure long-term benefits has led to the company’s decision of focusing on tight operational discipline.
Nokia seems to be ready to fight out the ever-increasing tough competition especially from Ericsson and China’s Huawei. Ericsson, which is based in Sweden, recently saw its shares declining sharply after the company’s declaration of the competition affecting the profit margin in the second half of the year. Huawei, on the other hand, battled its own challenges with Washington’s allegations of its equipments used by Beijing for spying purposes.
What Do Q2 Numbers Say About Nokia’s Future?
The EPS for Q2 was 0.05 euro beating the projection of 0.03 euro. The company reported a 7% revenue increase from previous years’ figure of 5.69 euro (the forecasted figure was 5.43 billion euro).
The Q2 results clearly imply the company’s bouncing back and a quicker recovery. Nokia expects the full-year EPS to be 0.25-0.29 euro for 2019 and 0.37-0.42 euro for 2020 based on the growing 5G demand.