Executive Summary
Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers.
Rewards
Risk Analysis
+ 2 more risks
Snowflake Analysis
Adequate balance sheet with questionable track record.
Similar Companies
Share Price & News
How has Telefonaktiebolaget LM Ericsson's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: ERIC B's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
0.5%
ERIC B
0.6%
SE Communications
4.8%
SE Market
1 Year Return
-6.4%
ERIC B
-6.0%
SE Communications
8.7%
SE Market
Return vs Industry: ERIC B matched the Swedish Communications industry which returned -6% over the past year.
Return vs Market: ERIC B underperformed the Swedish Market which returned 8.7% over the past year.
Shareholder returns
| ERIC B | Industry | Market | |
|---|---|---|---|
| 7 Day | 0.5% | 0.6% | 4.8% |
| 30 Day | 0.6% | 2.8% | 4.7% |
| 90 Day | 11.7% | 12.4% | -1.7% |
| 1 Year | -5.5%-6.4% | -5.1%-6.0% | 10.2%8.7% |
| 3 Year | 39.1%33.7% | 37.2%31.9% | 11.7%-3.2% |
| 5 Year | -1.2%-10.8% | 0.8%-9.0% | 30.6%5.1% |
Price Volatility Vs. Market
How volatile is Telefonaktiebolaget LM Ericsson's share price compared to the market and industry in the last 5 years?
Simply Wall St News
6 days ago | Simply Wall St
We Think Telefonaktiebolaget LM Ericsson's (STO:ERIC B) Statutory Profit Might Understate Its Earnings Potential2 weeks ago | Simply Wall St
Telefonaktiebolaget LM Ericsson (STO:ERIC B) Has A Pretty Healthy Balance Sheet1 month ago | Simply Wall St
How Many Telefonaktiebolaget LM Ericsson (publ) (STO:ERIC B) Shares Do Institutions Own?Valuation
Is Telefonaktiebolaget LM Ericsson undervalued compared to its fair value and its price relative to the market?
14.3%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ERIC B (SEK85.64) is trading below our estimate of fair value (SEK99.98)
Significantly Below Fair Value: ERIC B is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: ERIC B is poor value based on its PE Ratio (137.5x) compared to the Communications industry average (53.4x).
PE vs Market: ERIC B is poor value based on its PE Ratio (137.5x) compared to the Swedish market (18.6x).
Price to Earnings Growth Ratio
PEG Ratio: ERIC B is poor value based on its PEG Ratio (7.6x)
Price to Book Ratio
PB vs Industry: ERIC B is overvalued based on its PB Ratio (3.6x) compared to the SE Communications industry average (1.2x).
Next Steps
Future Growth
How is Telefonaktiebolaget LM Ericsson forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?
18.2%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ERIC B's forecast earnings growth (18.2% per year) is above the savings rate (0.5%).
Earnings vs Market: ERIC B's earnings (18.2% per year) are forecast to grow faster than the Swedish market (16.9% per year).
High Growth Earnings: ERIC B's earnings are forecast to grow, but not significantly.
Revenue vs Market: ERIC B's revenue (2.9% per year) is forecast to grow slower than the Swedish market (5.9% per year).
High Growth Revenue: ERIC B's revenue (2.9% 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 low in 3 years time (19.4%).
Next Steps
Past Performance
How has Telefonaktiebolaget LM Ericsson performed over the past 5 years?
-38.0%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ERIC B has a large one-off loss of SEK13.2B impacting its March 31 2020 financial results.
Growing Profit Margin: ERIC B became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: ERIC B has become profitable over the past 5 years, growing earnings by -38% per year.
Accelerating Growth: ERIC B has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: ERIC B has become profitable in the last year, making it difficult to compare its past year earnings growth to the Communications industry (13.9%).
Return on Equity
High ROE: ERIC B's Return on Equity (2.2%) is considered low.
Next Steps
Financial Health
How is Telefonaktiebolaget LM Ericsson's financial position?
Financial Position Analysis
Short Term Liabilities: ERIC B's short term assets (SEK162.1B) exceed its short term liabilities (SEK133.1B).
Long Term Liabilities: ERIC B's short term assets (SEK162.1B) exceed its long term liabilities (SEK80.1B).
Debt to Equity History and Analysis
Debt Level: ERIC B's debt to equity ratio (52%) is considered high.
Reducing Debt: ERIC B's debt to equity ratio has increased from 17.7% to 52% over the past 5 years.
Debt Coverage: ERIC B's debt is well covered by operating cash flow (37.5%).
Interest Coverage: ERIC B's interest payments on its debt are well covered by EBIT (43.7x coverage).
Balance Sheet
Next Steps
Dividend
What is Telefonaktiebolaget LM Ericsson's current dividend yield, its reliability and sustainability?
1.75%
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: ERIC B's dividend (1.75%) is higher than the bottom 25% of dividend payers in the Swedish market (1.75%).
High Dividend: ERIC B's dividend (1.75%) is low compared to the top 25% of dividend payers in the Swedish market (5.58%).
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 high payout ratio (240.8%), ERIC B's dividend payments are not 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 (43.4% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
3.1yrs
Average management tenure
CEO
E. Ekholm (56yo)
3.33yrs
Tenure
kr133,212
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 ($USD14.13K) is below average for companies of similar size in the Swedish market ($USD2.30M).
Compensation vs Earnings: E.'s compensation has been consistent with company performance over the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 3.33yrs | kr133.21k | 0.029% SEK88.8m | |
| Senior VP | 3.08yrs | no data | 0.0014% SEK4.2m | |
| Chief Accounting Officer | no data | no data | no data | |
| Group CTO | 2.83yrs | no data | no data | |
| VP & Head of Investor Relations | 6.67yrs | no data | no data | |
| Senior VP | 2.08yrs | no data | no data | |
| SVP, Chief Marketing & Communications Officer and Head of Group Function Mktg. & Corporate Relations | 0.92yr | no data | no data | |
| Senior VP | 3.5yrs | no data | 0.00094% SEK2.9m | |
| VP & Head of External Communications | no data | no data | no data | |
| Head of Group Function Financial Control | no data | no data | no data |
3.1yrs
Average Tenure
55yo
Average Age
Experienced Management: ERIC B's management team is considered experienced (3.1 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 3.33yrs | kr133.21k | 0.029% SEK88.8m | |
| Independent Director | 7.08yrs | kr1.38m | 0.00011% SEK335.8k | |
| Independent Director | 2.17yrs | kr1.13m | 0.0014% SEK4.3m | |
| Deputy Independent Chairman | 4.08yrs | kr1.09m | 0.00057% SEK1.7m | |
| Deputy Independent Chairman | no data | kr1.03m | 0.012% SEK36.9m | |
| Independent Director | 3.17yrs | kr958.79k | no data | |
| Employee Representative Director | 2.17yrs | kr40.50k | 0.00092% SEK2.8m | |
| Independent Chairman of the Board | 2.17yrs | kr3.80m | 0.0028% SEK8.6m | |
| Employee Representative Director | 3.17yrs | kr36.00k | 0.00041% SEK1.3m | |
| Independent Director | 3.17yrs | kr1.33m | 0.00028% SEK854.8k |
3.2yrs
Average Tenure
58.5yo
Average Age
Experienced Board: ERIC B's board of directors are considered experienced (3.2 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 been diluted in the past year, with total shares outstanding growing by 7.3%.
Top Shareholders
Company Information
Telefonaktiebolaget LM Ericsson (publ)'s company bio, 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: kr305.288b
- Shares outstanding: 3.54b
- Website: https://www.ericsson.com
Number of Employees
Location
- Telefonaktiebolaget LM Ericsson (publ)
- Torshamnsgatan 21
- Kista
- Stockholm
- Stockholm County
- 164 83
- Sweden
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ERIC | NasdaqGS (Nasdaq Global Select) | ADR B SEK 10 | US | USD | Dec 1972 | |
| ERIC N | BMV (Bolsa Mexicana de Valores) | ADR B SEK 10 | MX | MXN | Dec 1972 | |
| ERCA | DB (Deutsche Boerse AG) | ADR B SEK 10 | DE | EUR | Dec 1972 | |
| ERCA | XTRA (XETRA Trading Platform) | ADR B SEK 10 | DE | EUR | Dec 1972 | |
| ERIX.F | OTCPK (Pink Sheets LLC) | Yes | Class B Shares | US | USD | Sep 1990 |
| ERIC B | OM (OMX Nordic Exchange Stockholm) | Yes | Class B Shares | SE | SEK | Sep 1990 |
| ERCB | DB (Deutsche Boerse AG) | Yes | Class B Shares | DE | EUR | Sep 1990 |
| 0O87 | LSE (London Stock Exchange) | Yes | Class B Shares | GB | SEK | Sep 1990 |
| ERIBR | HLSE (OMX Nordic Exchange Helsinki) | Yes | Class B Shares | FI | EUR | Sep 1990 |
| ERICB | SWX (SIX Swiss Exchange) | Yes | Class B Shares | CH | CHF | Sep 1990 |
| ERCB | XTRA (XETRA Trading Platform) | Yes | Class B Shares | DE | EUR | Sep 1990 |
| ERICBS | BATS-CHIXE (BATS 'Chi-X Europe') | Yes | Class B Shares | GB | SEK | Sep 1990 |
| ERIBRH | BATS-CHIXE (BATS 'Chi-X Europe') | Yes | Class B Shares | GB | EUR | Sep 1990 |
| ERCB | ETLX (Eurotlx) | Yes | Class B Shares | IT | EUR | Sep 1990 |
| ERIC A | OM (OMX Nordic Exchange Stockholm) | Class A Shares | SE | SEK | Jan 1992 | |
| ERCG | XTRA (XETRA Trading Platform) | Class A Shares | DE | EUR | Jan 1992 | |
| 0O86 | LSE (London Stock Exchange) | Class A Shares | GB | SEK | Jan 1992 | |
| ERCG | DB (Deutsche Boerse AG) | Class A Shares | DE | EUR | Jan 1992 | |
| ERICAS | BATS-CHIXE (BATS 'Chi-X Europe') | Class A Shares | GB | SEK | Jan 1992 |
Biography
Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment provides hardware, software, and related services for radio access and transport, as well as related services, such as design, tuning, network rollout, and customer support. The Digital Services segment offers products and services for operators in the areas of business support systems, operations support systems, cloud core, cloud communication, network functions virtualization, and cloud infrastructure, as well as consulting, learning, and testing services. The Managed Services segment provides networks and IT managed, network design and optimization, and application development and maintenance services to operators. The Emerging Business and Other segment consists of emerging businesses; iconectiv that offers software-based interconnection solutions; and Red Bee Media, which consists of technology enabled services to manage the play-out platform for broadcasters and content owners. It operates in North America, Europe and Latin America, the Middle East and Africa, South East Asia, Oceania, India, North East Asia, and internationally. The company was founded in 1876 and is headquartered in Stockholm, Sweden.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/05/30 21:37 |
| End of Day Share Price | 2020/05/29 00:00 |
| Earnings | 2020/03/31 |
| Annual Earnings | 2019/12/31 |
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.