ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.202 EUR
+0.02 (+0.27%)
Taking everything into account, ERCB scores 6 out of 10 in our fundamental rating. ERCB was compared to 28 industry peers in the Communications Equipment industry. ERCB has an excellent profitability rating, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on ERCB. ERCB also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ERCB had positive earnings in the past year.
ERCB had a positive operating cash flow in the past year.
ERCB had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ERCB had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 8.72%, ERCB belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
ERCB has a Return On Equity of 24.01%. This is amongst the best in the industry. ERCB outperforms 89.29% of its industry peers.
ERCB's Return On Invested Capital of 13.55% is amongst the best of the industry. ERCB outperforms 85.71% of its industry peers.
ERCB had an Average Return On Invested Capital over the past 3 years of 9.43%. This is in line with the industry average of 10.55%.
The 3 year average ROIC (9.43%) for ERCB is below the current ROIC(13.55%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROIC | 13.55% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)9.43%
ROIC(5y)10.87%
1.3 Margins
Looking at the Profit Margin, with a value of 10.26%, ERCB belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
ERCB's Profit Margin has declined in the last couple of years.
ERCB has a better Operating Margin (12.97%) than 82.14% of its industry peers.
In the last couple of years the Operating Margin of ERCB has grown nicely.
ERCB has a Gross Margin of 47.62%. This is comparable to the rest of the industry: ERCB outperforms 57.14% of its industry peers.
In the last couple of years the Gross Margin of ERCB has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% |
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
2. Health
2.1 Basic Checks
ERCB has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for ERCB remains at a similar level compared to 1 year ago.
Compared to 5 years ago, ERCB has more shares outstanding
Compared to 1 year ago, ERCB has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of ERCB is 1.45, which is an excellent value as it means it would take ERCB, only 1.45 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ERCB (1.45) is better than 82.14% of its industry peers.
ERCB has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ERCB (0.35) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.06
WACC6.58%
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.
With a Current ratio value of 1.17, ERCB is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
ERCB has a Quick Ratio of 1.17. This is a bad value and indicates that ERCB is not financially healthy enough and could expect problems in meeting its short term obligations.
ERCB's Quick ratio of 0.94 is on the low side compared to the rest of the industry. ERCB is outperformed by 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
ERCB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 541.12%, which is quite impressive.
Measured over the past years, ERCB shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -17.01% on average per year.
The Revenue has decreased by -2.65% in the past year.
The Revenue has been growing slightly by 1.76% on average over the past years.
EPS 1Y (TTM)541.12%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%113.66%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
3.2 Future
Based on estimates for the next years, ERCB will show a very strong growth in Earnings Per Share. The EPS will grow by 30.26% on average per year.
ERCB is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.91% yearly.
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.65, the valuation of ERCB can be described as reasonable.
ERCB's Price/Earnings ratio is rather cheap when compared to the industry. ERCB is cheaper than 92.86% of the companies in the same industry.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (25.65), we can say ERCB is valued rather cheaply.
With a Price/Forward Earnings ratio of 13.67, ERCB is valued correctly.
Based on the Price/Forward Earnings ratio, ERCB is valued cheaper than 82.14% of the companies in the same industry.
ERCB's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.65 | ||
| Fwd PE | 13.67 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 85.71% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCB indicates a somewhat cheap valuation: ERCB is cheaper than 71.43% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.9 | ||
| EV/EBITDA | 6.99 |
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 an outstanding profitability rating, which may justify a higher PE ratio.
ERCB's earnings are expected to grow with 59.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y96.63%
EPS Next 3Y59.26%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.15%. Purely for dividend investing, there may be better candidates out there.
ERCB's Dividend Yield is rather good when compared to the industry average which is at 5.50. ERCB pays more dividend than 89.29% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, ERCB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
5.2 History
The dividend of ERCB is nicely growing with an annual growth rate of 22.02%!
Dividend Growth(5Y)22.02%
Div Incr Years1
Div Non Decr Years6
5.3 Sustainability
37.84% of the earnings are spent on dividend by ERCB. This is a low number and sustainable payout ratio.
The dividend of ERCB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
FRA:ERCB (11/24/2025, 7:00:00 PM)
8.202
+0.02 (+0.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners54.97%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap27.34B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target7.92 (-3.44%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
Yearly Dividend0.24
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years1
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)49.11%
Min EPS beat(2)20.62%
Max EPS beat(2)77.6%
EPS beat(4)3
Avg EPS beat(4)34.33%
Min EPS beat(4)-10.72%
Max EPS beat(4)77.6%
EPS beat(8)6
Avg EPS beat(8)-29.88%
EPS beat(12)9
Avg EPS beat(12)-11.71%
EPS beat(16)10
Avg EPS beat(16)-8.77%
Revenue beat(2)0
Avg Revenue beat(2)-3.63%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-0.88%
Revenue beat(4)0
Avg Revenue beat(4)-2.46%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.31%
Revenue beat(12)3
Avg Revenue beat(12)-1.5%
Revenue beat(16)7
Avg Revenue beat(16)-0.68%
PT rev (1m)11.27%
PT rev (3m)10.76%
EPS NQ rev (1m)21.99%
EPS NQ rev (3m)14.08%
EPS NY rev (1m)20.53%
EPS NY rev (3m)19.27%
Revenue NQ rev (1m)0.72%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.65 | ||
| Fwd PE | 13.67 | ||
| P/S | 1.25 | ||
| P/FCF | 9.9 | ||
| P/OCF | 8.86 | ||
| P/B | 2.93 | ||
| P/tB | 6.71 | ||
| EV/EBITDA | 6.99 |
EPS(TTM)0.77
EY9.39%
EPS(NY)0.6
Fwd EY7.32%
FCF(TTM)0.83
FCFY10.1%
OCF(TTM)0.93
OCFY11.29%
SpS6.55
BVpS2.8
TBVpS1.22
PEG (NY)0.03
PEG (5Y)N/A
Graham Number6.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 19.24% | ||
| ROIC | 13.55% | ||
| ROICexc | 19.78% | ||
| ROICexgc | 41.31% | ||
| OM | 12.97% | ||
| PM (TTM) | 10.26% | ||
| GM | 47.62% | ||
| FCFM | 12.65% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)9.43%
ROIC(5y)10.87%
ROICexc(3y)13.21%
ROICexc(5y)15.92%
ROICexgc(3y)41.96%
ROICexgc(5y)38.68%
ROCE(3y)13.4%
ROCE(5y)15.43%
ROICexgc growth 3Y9.12%
ROICexgc growth 5Y7.91%
ROICexc growth 3Y-8.84%
ROICexc growth 5Y4.9%
OM growth 3Y-12.66%
OM growth 5Y14.26%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
F-Score6
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 0.87 | ||
| Cap/Depr | 36.83% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 13.31 | ||
| Cash Conversion | 83.18% | ||
| Profit Quality | 123.37% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | N/A |
F-Score6
WACC6.58%
ROIC/WACC2.06
Cap/Depr(3y)47.04%
Cap/Depr(5y)51.35%
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)541.12%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%113.66%
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y15.06%
FCF growth 1Y392.6%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y169.74%
OCF growth 3Y5.8%
OCF growth 5Y22.35%
ERICSSON LM-B SHS / ERCB.DE FAQ
Can you provide the ChartMill fundamental rating for ERICSSON LM-B SHS?
ChartMill assigns a fundamental rating of 6 / 10 to ERCB.DE.
What is the valuation status of ERICSSON LM-B SHS (ERCB.DE) stock?
ChartMill assigns a valuation rating of 9 / 10 to ERICSSON LM-B SHS (ERCB.DE). This can be considered as Undervalued.
How profitable is ERICSSON LM-B SHS (ERCB.DE) stock?
ERICSSON LM-B SHS (ERCB.DE) has a profitability rating of 8 / 10.
Can you provide the financial health for ERCB stock?
The financial health rating of ERICSSON LM-B SHS (ERCB.DE) is 4 / 10.
What is the expected EPS growth for ERICSSON LM-B SHS (ERCB.DE) stock?
The Earnings per Share (EPS) of ERICSSON LM-B SHS (ERCB.DE) is expected to grow by 348.24% in the next year.