| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 1/6 |
| Past Performance | 4/6 |
| Financial Health | 5/6 |
| Dividends | 3/6 |
ERIC Stock 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
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | kr7.37 |
| 52 Week High | kr13.40 |
| 52 Week Low | kr7.23 |
| Beta | 0.14 |
| 1 Month Change | -10.23% |
| 3 Month Change | -22.01% |
| 1 Year Change | -43.05% |
| 3 Year Change | -21.93% |
| 5 Year Change | 0.27% |
| Change since IPO | 63.35% |
Recent News & Updates
Ericsson: Hold As It Faces Uncertain Future
Telefonaktiebolaget LM Ericsson is amongst the leading communications infrastructure companies in the world that is a major player in the upcoming IoT and 5G domains. The company saw a share plummet this year, after confirmation of its involvement in corrupt practices, which included secret dealings with the terror group, ISIS. ERIC’s financial performance had taken a substantial hit as a result of disruptions caused by Russia’s invasion of Ukraine, and the subsequent economic implications of sanctions. In comparison to its peers, certain valuation metrics hint at an undervaluation, whilst others emphasize they are better investment options within the industry.
Ericsson: A Swedish Telco Major With Risk As Well As Upside
Ericsson is probably the company that most investors have wanted me to look at for the longest amount of time. I haven't - until now. There are very specific reasons why I'm hesitant to invest in native Ericsson and why my investments in the company are "indirect." However, following recent trends, there's an upside. And you SHOULD know Ericsson. So, I'm going to teach you about Ericsson and tell you what you need to know.
Shareholder Returns
| ERIC | US Communications | US Market | |
|---|---|---|---|
| 7D | -5.3% | -2.0% | 0.3% |
| 1Y | -43.0% | -18.7% | -18.4% |
Return vs Industry: ERIC underperformed the US Communications industry which returned -18.5% over the past year.
Return vs Market: ERIC underperformed the US Market which returned -19.1% over the past year.
Price Volatility
| ERIC volatility | |
|---|---|
| ERIC Average Weekly Movement | 5.6% |
| Communications Industry Average Movement | 8.3% |
| Market Average Movement | 8.1% |
| 10% most volatile stocks in US Market | 16.8% |
| 10% least volatile stocks in US Market | 3.3% |
Stable Share Price: ERIC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: ERIC's weekly volatility (6%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1876 | 101,067 | E. Ekholm | https://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 radio access network solutions for various network spectrum bands, including integrated high-performing hardware and software.
Telefonaktiebolaget LM Ericsson Fundamentals Summary
| ERIC fundamental statistics | |
|---|---|
| Market Cap | kr257.42b |
| Earnings (TTM) | kr22.45b |
| Revenue (TTM) | kr237.60b |
11.4x
P/E Ratio1.1x
P/S RatioIs ERIC overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| ERIC income statement (TTM) | |
|---|---|
| Revenue | kr237.60b |
| Cost of Revenue | kr134.64b |
| Gross Profit | kr102.96b |
| Other Expenses | kr80.51b |
| Earnings | kr22.45b |
Last Reported Earnings
Mar 31, 2022
Next Earnings Date
Jul 14, 2022
| Earnings per share (EPS) | 6.74 |
| Gross Margin | 43.33% |
| Net Profit Margin | 9.45% |
| Debt/Equity Ratio | 35.5% |
How did ERIC perform over the long term?
See historical performance and comparisonDividends
3.3%
Current Dividend Yield37%
Payout RatioValuation
Is ERIC undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio
Key Valuation Metric
Which metric is best to use when looking at relative valuation for ERIC?
Other financial metrics that can be useful for relative valuation.
| What is ERIC's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | kr257.42b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 0.9x |
| Enterprise Value/EBITDA | 5.6x |
| PEG Ratio | 1.5x |
Price to Earnings Ratio vs Peers
How does ERIC's PE Ratio compare to its peers?
| ERIC PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 30.1x | ||
ANET Arista Networks | 31.8x | 11.1% | US$29.6b |
MSI Motorola Solutions | 28x | 10.4% | US$35.5b |
UI Ubiquiti | 33.9x | 8.2% | US$14.9b |
JNPR Juniper Networks | 26.7x | 11.7% | US$9.1b |
ERIC Telefonaktiebolaget LM Ericsson | 11.4x | 7.4% | US$257.4b |
Price-To-Earnings vs Peers: ERIC is good value based on its Price-To-Earnings Ratio (11.4x) compared to the peer average (30.1x).
Price to Earnings Ratio vs Industry
How does ERIC's PE Ratio compare vs other companies in the US Communications Industry?
Price-To-Earnings vs Industry: ERIC is good value based on its Price-To-Earnings Ratio (11.4x) compared to the US Communications industry average (21.8x)
Price to Earnings Ratio vs Fair Ratio
What is ERIC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 11.4x |
| Fair PE Ratio | 22.2x |
Price-To-Earnings vs Fair Ratio: ERIC is good value based on its Price-To-Earnings Ratio (11.4x) compared to the estimated Fair Price-To-Earnings Ratio (22.2x).
Share Price vs Fair Value
What is the Fair Price of ERIC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: ERIC ($7.37) is trading below our estimate of fair value ($16.46)
Significantly Below Fair Value: ERIC is trading below fair value by more than 20%.
Price to Earnings Growth Ratio
PEG Ratio: ERIC is poor value based on its PEG Ratio (1.5x)
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Future Growth
How is Telefonaktiebolaget LM Ericsson forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?
Future Growth Score
1/6Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
7.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ERIC's forecast earnings growth (7.4% per year) is above the savings rate (1.9%).
Earnings vs Market: ERIC's earnings (7.4% per year) are forecast to grow slower than the US market (12.8% per year).
High Growth Earnings: ERIC's earnings are forecast to grow, but not significantly.
Revenue vs Market: ERIC's revenue (2.3% per year) is forecast to grow slower than the US market (7.8% per year).
High Growth Revenue: ERIC's revenue (2.3% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ERIC's Return on Equity is forecast to be low in 3 years time (18.7%).
Discover growth companies
Past Performance
How has Telefonaktiebolaget LM Ericsson performed over the past 5 years?
Past Performance Score
4/6Past Performance Score 4/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
70.5%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ERIC has high quality earnings.
Growing Profit Margin: ERIC's current net profit margins (9.4%) are higher than last year (8%).
Past Earnings Growth Analysis
Earnings Trend: ERIC has become profitable over the past 5 years, growing earnings by 70.5% per year.
Accelerating Growth: ERIC's earnings growth over the past year (21.2%) is below its 5-year average (70.5% per year).
Earnings vs Industry: ERIC earnings growth over the past year (21.2%) underperformed the Communications industry 35.7%.
Return on Equity
High ROE: ERIC's Return on Equity (20.7%) is considered high.
Discover strong past performing companies
Financial Health
How is Telefonaktiebolaget LM Ericsson's financial position?
Financial Health Score
5/6Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: ERIC's short term assets (SEK207.1B) exceed its short term liabilities (SEK141.2B).
Long Term Liabilities: ERIC's short term assets (SEK207.1B) exceed its long term liabilities (SEK72.9B).
Debt to Equity History and Analysis
Debt Level: ERIC has more cash than its total debt.
Reducing Debt: ERIC's debt to equity ratio has increased from 29.4% to 35.5% over the past 5 years.
Debt Coverage: ERIC's debt is well covered by operating cash flow (92%).
Interest Coverage: ERIC's interest payments on its debt are well covered by EBIT (36.9x coverage).
Balance Sheet
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Dividend
What is Telefonaktiebolaget LM Ericsson current dividend yield, its reliability and sustainability?
Dividend Score
3/6Dividend Score 3/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
3.26%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: ERIC's dividend (3.26%) is higher than the bottom 25% of dividend payers in the US market (1.6%).
High Dividend: ERIC's dividend (3.26%) is low compared to the top 25% of dividend payers in the US market (4.24%).
Stability and Growth of Payments
Stable Dividend: ERIC's dividend payments have been volatile in the past 10 years.
Growing Dividend: ERIC's dividend payments have not increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (37.1%), ERIC's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (26.6%), ERIC's dividend payments are well covered by cash flows.
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
5.4yrs
Average management tenure
CEO
E. Ekholm (59 yo)
5.5yrs
Tenure
kr65,114,294
Compensation
Mr. E. Borje 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 ($USD6.18M) is below average for companies of similar size in the US market ($USD13.41M).
Compensation vs Earnings: E.'s compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: ERIC's management team is seasoned and experienced (5.4 years average tenure).
Board Members
Experienced Board: ERIC's board of directors are considered experienced (5.3 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: ERIC insiders have bought more shares than they have sold 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
- Exchange: NasdaqGS
- Founded: 1876
- Industry: Communications Equipment
- Sector: Tech
- Implied Market Cap: kr257.417b
- Listing Market Cap: kr24.425b
- 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/07/05 00:00 |
| End of Day Share Price | 2022/07/05 00:00 |
| Earnings | 2022/03/31 |
| Annual Earnings | 2021/12/31 |
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.