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ERIC

Telefonaktiebolaget LM EricssonOM:ERIC B Stock Report

Market Cap

kr321.6b

7D

-5.5%

1Y

-6.7%

Updated

26 Oct, 2021

Data

Company Financials +
ERIC B fundamental analysis
Snowflake Score
Valuation4/6
Future Growth3/6
Past Performance4/6
Financial Health5/6
Dividends3/6

ERIC B Overview

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecom and other sectors.

Telefonaktiebolaget LM Ericsson Competitors

Microsoft

NasdaqGS:MSFT

US$2.3t

Facebook

NasdaqGS:FB

US$926.7b

NVIDIA

NasdaqGS:NVDA

US$578.2b

Samsung Electronics

KOSE:A005930

₩477.9t

Price History & Performance

Summary of all time highs, changes and price drops for Telefonaktiebolaget LM Ericsson
Historical stock prices
Current Share Pricekr96.58
52 Week Highkr94.71
52 Week Lowkr121.80
Beta0.16
1 Month Change-4.24%
3 Month Change-2.92%
1 Year Change-6.69%
3 Year Change21.88%
5 Year Change122.02%
Change since IPO178.43%

Recent News & Updates

Oct 20
Investors Don't See Light At End Of Telefonaktiebolaget LM Ericsson (publ)'s (STO:ERIC B) Tunnel

Investors Don't See Light At End Of Telefonaktiebolaget LM Ericsson (publ)'s (STO:ERIC B) Tunnel

Telefonaktiebolaget LM Ericsson (publ)'s ( STO:ERIC B ) price-to-earnings (or "P/E") ratio of 16.9x might make it look...

Sep 23
Is Telefonaktiebolaget LM Ericsson (STO:ERIC B) Using Too Much Debt?

Is Telefonaktiebolaget LM Ericsson (STO:ERIC B) Using Too Much Debt?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that...

Sep 09
Telefonaktiebolaget LM Ericsson (STO:ERIC B) Is Increasing Its Dividend To kr1.00

Telefonaktiebolaget LM Ericsson (STO:ERIC B) Is Increasing Its Dividend To kr1.00

Telefonaktiebolaget LM Ericsson (publ) ( STO:ERIC B ) has announced that it will be increasing its dividend on the 6th...

Aug 31
Telefonaktiebolaget LM Ericsson (STO:ERIC B) Is Investing Its Capital With Increasing Efficiency

Telefonaktiebolaget LM Ericsson (STO:ERIC B) Is Investing Its Capital With Increasing Efficiency

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

ERIC BSE CommunicationsSE Market
7D-5.5%-8.6%1.8%
1Y-6.7%-4.6%37.7%

Return vs Industry: ERIC B underperformed the Swedish Communications industry which returned -4.6% over the past year.

Return vs Market: ERIC B underperformed the Swedish Market which returned 34.1% over the past year.

Price Volatility

Is ERIC B's price volatile compared to industry and market?
ERIC B volatility
ERIC B Beta0.16
Industry Beta1.33
Market Beta1

Stable Share Price: ERIC B is less volatile than 75% of Swedish stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: ERIC B's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1876102,203E. Ekholmhttps://www.ericsson.com

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecom and other sectors. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment offers hardware, software, and related services for radio access and transport, as well as related services, such as design, tuning, network rollout, and customer support.

Telefonaktiebolaget LM Ericsson Fundamentals Summary

How do Telefonaktiebolaget LM Ericsson's earnings and revenue compare to its market cap?
ERIC B fundamental statistics
Market Capkr321.64b
Earnings (TTM)kr20.14b
Revenue (TTM)kr230.57b

16.0x

P/E Ratio

1.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ERIC B income statement (TTM)
Revenuekr230.57b
Cost of Revenuekr132.31b
Gross Profitkr98.26b
Expenseskr78.12b
Earningskr20.14b

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)6.05
Gross Margin42.62%
Net Profit Margin8.73%
Debt/Equity Ratio33.9%

How did ERIC B perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

33%

Payout Ratio

Valuation

Is Telefonaktiebolaget LM Ericsson undervalued compared to its fair value and its price relative to the market?

39.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ERIC B (SEK96.15) is trading below our estimate of fair value (SEK160.16)

Significantly Below Fair Value: ERIC B is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ERIC B is good value based on its PE Ratio (15.9x) compared to the Swedish Communications industry average (56.2x).

PE vs Market: ERIC B is good value based on its PE Ratio (15.9x) compared to the Swedish market (23.5x).


Price to Earnings Growth Ratio

PEG Ratio: ERIC B is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: ERIC B is overvalued based on its PB Ratio (3.3x) compared to the SE Communications industry average (3x).


Future Growth

How is Telefonaktiebolaget LM Ericsson forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

10.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERIC B's forecast earnings growth (10.1% per year) is above the savings rate (0.3%).

Earnings vs Market: ERIC B's earnings (10.1% per year) are forecast to grow faster than the Swedish market (5.5% per year).

High Growth Earnings: ERIC B's earnings are forecast to grow, but not significantly.

Revenue vs Market: ERIC B's revenue (2.8% per year) is forecast to grow slower than the Swedish market (4.8% per year).

High Growth Revenue: ERIC B's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ERIC B's Return on Equity is forecast to be high in 3 years time (20.5%)


Past Performance

How has Telefonaktiebolaget LM Ericsson performed over the past 5 years?

52.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ERIC B has high quality earnings.

Growing Profit Margin: ERIC B's current net profit margins (8.7%) are higher than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: ERIC B's earnings have grown significantly by 52.5% per year over the past 5 years.

Accelerating Growth: ERIC B's earnings growth over the past year (39.9%) is below its 5-year average (52.5% per year).

Earnings vs Industry: ERIC B earnings growth over the past year (39.9%) underperformed the Communications industry 39.9%.


Return on Equity

High ROE: ERIC B's Return on Equity (20.9%) is considered high.


Financial Health

How is Telefonaktiebolaget LM Ericsson's financial position?


Financial Position Analysis

Short Term Liabilities: ERIC B's short term assets (SEK163.1B) exceed its short term liabilities (SEK125.9B).

Long Term Liabilities: ERIC B's short term assets (SEK163.1B) exceed its long term liabilities (SEK69.0B).


Debt to Equity History and Analysis

Debt Level: ERIC B's debt to equity ratio (33.9%) is considered satisfactory.

Reducing Debt: ERIC B's debt to equity ratio has increased from 20.4% to 33.9% over the past 5 years.

Debt Coverage: ERIC B's debt is well covered by operating cash flow (116.4%).

Interest Coverage: ERIC B's interest payments on its debt are well covered by EBIT (17x coverage).


Balance Sheet


Dividend

What is Telefonaktiebolaget LM Ericsson current dividend yield, its reliability and sustainability?

2.07%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ERIC B's dividend (2.08%) is higher than the bottom 25% of dividend payers in the Swedish market (0.91%).

High Dividend: ERIC B's dividend (2.08%) is low compared to the top 25% of dividend payers in the Swedish market (3.55%).


Stability and Growth of Payments

Stable Dividend: ERIC B's dividend payments have been volatile in the past 10 years.

Growing Dividend: ERIC B's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33.1%), ERIC B's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ERIC B's dividends in 3 years are forecast to be well covered by earnings (36.4% payout ratio).


Next Steps

  • Explore strong dividend paying companies in the Tech industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

E. Ekholm (58 yo)

4.75yrs

Tenure

kr106,413,610

Compensation

Mr. E. Börje Ekholm, MSc, MBA serves as Independent Director of Trimble Inc. since January 04, 2020. He has been the Chief Executive Officer and President of Telefonaktiebolaget LM Ericsson (publ) since Ja...


CEO Compensation Analysis

Compensation vs Market: E.'s total compensation ($USD12.38M) is above average for companies of similar size in the Swedish market ($USD2.43M).

Compensation vs Earnings: E.'s compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: ERIC B's management team is considered experienced (4.8 years average tenure).


Board Members

Experienced Board: ERIC B's board of directors are considered experienced (4.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ERIC B insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Telefonaktiebolaget LM Ericsson (publ)'s employee growth, exchange listings and data sources


Key Information

  • Name: Telefonaktiebolaget LM Ericsson (publ)
  • Ticker: ERIC B
  • Exchange: OM
  • Founded: 1876
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: kr321.644b
  • Shares outstanding: 3.33b
  • Website: https://www.ericsson.com

Number of Employees


Location

  • Telefonaktiebolaget LM Ericsson (publ)
  • Torshamnsgatan 21
  • Kista
  • Stockholm
  • Stockholm County
  • 164 83
  • Sweden

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/26 21:11
End of Day Share Price2021/10/26 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.