ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
FRA:ERCB - Deutsche Boerse Ag - SE0000108656 - Common Stock - Currency: EUR
Overall ERCB gets a fundamental rating of 5 out of 10. We evaluated ERCB against 25 industry peers in the Communications Equipment industry. ERCB has only an average score on both its financial health and profitability. ERCB scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year ERCB was profitable.
ERCB had a positive operating cash flow in the past year.
Of the past 5 years ERCB 4 years were profitable.
ERCB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERCB has a Return On Assets of 0.01%. This is in the better half of the industry: ERCB outperforms 61.54% of its industry peers.
ERCB's Return On Equity of 0.02% is fine compared to the rest of the industry. ERCB outperforms 61.54% of its industry peers.
The Return On Invested Capital of ERCB (9.97%) is better than 80.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.01% | ||
| ROE | 0.02% | ||
| ROIC | 9.97% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of ERCB (0.01%) is better than 61.54% of its industry peers.
ERCB's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 9.17%, ERCB is doing good in the industry, outperforming 69.23% of the companies in the same industry.
In the last couple of years the Operating Margin of ERCB has declined.
Looking at the Gross Margin, with a value of 44.95%, ERCB is in line with its industry, outperforming 42.31% of the companies in the same industry.
In the last couple of years the Gross Margin of ERCB has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.17% | ||
| PM (TTM) | 0.01% | ||
| GM | 44.95% |
OM growth 3Y-36.4%
OM growth 5Y-5.54%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ERCB is creating some value.
There is no outstanding debt for ERCB. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
ERCB has a debt to FCF ratio of 1.07. This is a very positive value and a sign of high solvency as it would only need 1.07 years to pay back of all of its debts.
ERCB's Debt to FCF ratio of 1.07 is amongst the best of the industry. ERCB outperforms 88.46% of its industry peers.
ERCB has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
ERCB has a Debt to Equity ratio (0.40) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.07 | ||
| Altman-Z | N/A |
ROIC/WACC1.42
WACC7.04%
2.3 Liquidity
ERCB has a Current Ratio of 1.17. This is a normal value and indicates that ERCB is financially healthy and should not expect problems in meeting its short term obligations.
ERCB has a worse Current ratio (1.17) than 80.77% of its industry peers.
A Quick Ratio of 0.96 indicates that ERCB may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.96, ERCB is doing worse than 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
The earnings per share for ERCB have decreased strongly by -60.46% in the last year.
ERCB shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
The Revenue has decreased by -5.87% in the past year.
The Revenue has been growing slightly by 1.76% on average over the past years.
EPS 1Y (TTM)-60.46%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%22.54%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%1.44%
3.2 Future
ERCB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 45.47% yearly.
The Revenue is expected to grow by 4.46% on average over the next years.
EPS Next Y285.55%
EPS Next 2Y98.48%
EPS Next 3Y63.32%
EPS Next 5Y45.47%
Revenue Next Year3.46%
Revenue Next 2Y2.8%
Revenue Next 3Y2.62%
Revenue Next 5Y4.46%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 49.55, which means the current valuation is very expensive for ERCB.
Based on the Price/Earnings ratio, ERCB is valued a bit cheaper than 61.54% of the companies in the same industry.
ERCB is valuated expensively when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.21, ERCB is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 92.31% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, ERCB is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.55 | ||
| Fwd PE | 13.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaper than 88.46% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERCB is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.8 | ||
| EV/EBITDA | 5.5 |
4.3 Compensation for Growth
ERCB's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ERCB has a very decent profitability rating, which may justify a higher PE ratio.
ERCB's earnings are expected to grow with 63.32% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y98.48%
EPS Next 3Y63.32%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.27%.
Compared to an average industry Dividend Yield of 3.51, ERCB pays a better dividend. On top of this ERCB pays more dividend than 88.46% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, ERCB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
5.2 History
On average, the dividend of ERCB grows each year by 21.64%, which is quite nice.
Dividend Growth(5Y)21.64%
Div Incr Years4
Div Non Decr Years5
5.3 Sustainability
46165.00% of the earnings are spent on dividend by ERCB. This is not a sustainable payout ratio.
The dividend of ERCB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP46165%
EPS Next 2Y98.48%
EPS Next 3Y63.32%
FRA:ERCB (3/7/2025, 7:00:00 PM)
7.928
+0 (+0.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners52.48%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap26.42B
Analysts54.48
Price Target7.84 (-1.11%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
Yearly Dividend0.25
Dividend Growth(5Y)21.64%
DP46165%
Div Incr Years4
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.72%
Min EPS beat(2)-10.72%
Max EPS beat(2)20.16%
EPS beat(4)2
Avg EPS beat(4)-104.77%
Min EPS beat(4)-588.91%
Max EPS beat(4)160.39%
EPS beat(8)6
Avg EPS beat(8)-35.13%
EPS beat(12)6
Avg EPS beat(12)-28.13%
EPS beat(16)8
Avg EPS beat(16)-17.87%
Revenue beat(2)0
Avg Revenue beat(2)-0.57%
Min Revenue beat(2)-0.69%
Max Revenue beat(2)-0.45%
Revenue beat(4)1
Avg Revenue beat(4)-0.49%
Min Revenue beat(4)-2.48%
Max Revenue beat(4)1.67%
Revenue beat(8)2
Avg Revenue beat(8)-1.21%
Revenue beat(12)6
Avg Revenue beat(12)-0.41%
Revenue beat(16)7
Avg Revenue beat(16)-1.15%
PT rev (1m)4%
PT rev (3m)10.61%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.93%
EPS NY rev (1m)-1.88%
EPS NY rev (3m)2.33%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.59%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.55 | ||
| Fwd PE | 13.21 | ||
| P/S | 1.17 | ||
| P/FCF | 6.8 | ||
| P/OCF | 6.27 | ||
| P/B | 3.07 | ||
| P/tB | 11.3 | ||
| EV/EBITDA | 5.5 |
EPS(TTM)0.16
EY2.02%
EPS(NY)0.6
Fwd EY7.57%
FCF(TTM)1.17
FCFY14.7%
OCF(TTM)1.27
OCFY15.96%
SpS6.78
BVpS2.58
TBVpS0.7
PEG (NY)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.01% | ||
| ROE | 0.02% | ||
| ROCE | 14.16% | ||
| ROIC | 9.97% | ||
| ROICexc | 15.38% | ||
| ROICexgc | 45.15% | ||
| OM | 9.17% | ||
| PM (TTM) | 0.01% | ||
| GM | 44.95% | ||
| FCFM | 17.19% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-36.4%
OM growth 5Y-5.54%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
F-Score5
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.07 | ||
| Debt/EBITDA | 0.77 | ||
| Cap/Depr | 14.14% | ||
| Cap/Sales | 1.47% | ||
| Interest Coverage | 7.47 | ||
| Cash Conversion | 95.45% | ||
| Profit Quality | 213105% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | N/A |
F-Score5
WACC7.04%
ROIC/WACC1.42
Cap/Depr(3y)39.65%
Cap/Depr(5y)46.92%
Cap/Sales(3y)1.94%
Cap/Sales(5y)2.02%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-60.46%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%22.54%
EPS Next Y285.55%
EPS Next 2Y98.48%
EPS Next 3Y63.32%
EPS Next 5Y45.47%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%1.44%
Revenue Next Year3.46%
Revenue Next 2Y2.8%
Revenue Next 3Y2.62%
Revenue Next 5Y4.46%
EBIT growth 1Y12.14%
EBIT growth 3Y-35.01%
EBIT growth 5Y-3.88%
EBIT Next Year79.02%
EBIT Next 3Y30.29%
EBIT Next 5Y16.92%
FCF growth 1Y2396.84%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y544.57%
OCF growth 3Y5.8%
OCF growth 5Y22.35%