Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Shares of beleaguered networking company Nokia NYSE: NOK have rallied off of multiyear lows.

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Full-year results were recently provided, showing revenue falling again and profitability proving elusive. However, a few areas of activity are providing hope that the company and its shareholders could enjoy better times in the near future. Nokia completed a merger with communications equipment and service provider Alcatel-Lucent last year.

Nokia itself has evolved into a communications service provider over the years, but with the combination with its new business partner, the company's future now hinges on its network business more than ever. The reason for the deal? Nokia wants to take the lead in building the technology for tomorrow's networks. Specifically, the company is betting on new 5G mobile networks, the closely related Internet of Things development, and the cloud.

The company's capabilities were on display at Mobile World Congress in Barcelona last month. Highlights included the showcasing of 5G FIRST, the first 5G network modem that will begin shipping out later this year. Also on display was new network technology that can help mobile communications providers bridge the gap between current 4G networks and the future 5G one.

The extent to which Nokia has hung its fate on mobile and cloud communications can be seen from its full-year revenue breakdown. Now that Nokia's transformation into a networking company is complete, emphasis on cost control and cost-cutting has begun. While the bottom line for full-year was red -- a million euro loss, to be exact -- the new sales from the acquisition and subsequent cost management helped the fourth-quarter bottom line rise to a million euro profit.

For many of us, Nokia may still be synonymous with mobile phones prior to the advent of the smart phone.

Nokia - NOK - Stock Price & News | The Motley Fool

While that business segment still exists it falls under Nokia Technologies division in the above chart , it has evolved into a licensing business model rather than an in-house affair. Nokia's phone business is now licensed out to a company called HMD Global Oy, which was founded by old Nokia execs.

That means Nokia receives royalty payments, an incredibly profitable business model compared with its other segments. Here are the operating level profits for each segment:. As a result, investors should pay attention to that mobile phone segment.

At Mobile World Congress, Nokia's attractively priced smart phones were featured, but it was the minimalist throwback that stole the show. Remember those old internet memes like "If a Nokia hits Chuck Norris, the Nokia wins"? For those who are ready to ditch high-tech connectivity for near-indestructible build and up to a month of battery life on standby mode, the reincarnated is for you.

What that means for investors is that, even though phones aren't Nokia's M. Even with renewed interest in its old business of phone making, most of Nokia's efforts revolve around next-gen networks and cost savings now that the Alcatel-Lucent merger is finished.

That ugly "Other" line item running an operating loss, for example. However, early efforts could be paying off. As of last quarter, net profits are back in the black and much of the company's efforts around 5G networks won't even begin to yield any return until next year at the earliest.

Investors interested in a value play should take a look, but expect a bumpy ride. Nicholas Rossolillo owns shares of AAPL.

The Motley Fool owns shares of and recommends AAPL. The Motley Fool has the following options: The Motley Fool has a disclosure policy.

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Nicholas has been a writer for the Motley Fool since , covering companies in the consumer goods and technology sector. He is also the founder and president of Concinnus Financial, a Registered Investment Advisor based in Spokane, WA. He enjoys the outdoors in all four seasons in the Northwest with his wife and their two Humane Society-rescued dogs.

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Nokia Corporation Stock Value Analysis (NYSE:NOK)

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