ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
FRA:ERCB - Deutsche Boerse Ag - SE0000108656 - Common Stock - Currency: EUR
Taking everything into account, ERCB scores 5 out of 10 in our fundamental rating. ERCB was compared to 25 industry peers in the Communications Equipment industry. ERCB has an average financial health and profitability rating. ERCB is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year ERCB was profitable.
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
Looking at the Return On Assets, with a value of 0.58%, ERCB is in line with its industry, outperforming 60.00% of the companies in the same industry.
The Return On Equity of ERCB (1.87%) is comparable to the rest of the industry.
ERCB has a better Return On Invested Capital (12.87%) than 92.00% 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 9.99%.
The last Return On Invested Capital (12.87%) for ERCB is above the 3 year average (9.43%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.58% | ||
| ROE | 1.87% | ||
| ROIC | 12.87% |
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
With a Profit Margin value of 0.65%, ERCB perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
ERCB's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 10.72%, ERCB is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
In the last couple of years the Operating Margin of ERCB has grown nicely.
ERCB has a Gross Margin (46.21%) which is in line with its industry peers.
ERCB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.72% | ||
| PM (TTM) | 0.65% | ||
| GM | 46.21% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ERCB is creating value.
ERCB has about the same amout of shares outstanding than it did 1 year ago.
ERCB has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ERCB has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of ERCB is 1.02, which is an excellent value as it means it would take ERCB, only 1.02 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.02, ERCB belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
ERCB has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ERCB (0.41) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.3
WACC5.59%
2.3 Liquidity
A Current Ratio of 1.09 indicates that ERCB should not have too much problems paying its short term obligations.
ERCB has a Current ratio of 1.09. This is amonst the worse of the industry: ERCB underperforms 80.00% of its industry peers.
ERCB has a Quick Ratio of 1.09. 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 has a Quick ratio of 0.88. This is in the lower half of the industry: ERCB underperforms 68.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
The earnings per share for ERCB have decreased strongly by -46.92% in the last year.
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 -1.79% in the past year.
Measured over the past years, ERCB shows a small growth in Revenue. The Revenue has been growing by 1.76% on average per year.
EPS 1Y (TTM)-46.92%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%60.24%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%3.19%
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 29.89% on average per year.
ERCB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.40% yearly.
EPS Next Y267.53%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
EPS Next 5Y29.89%
Revenue Next Year0.35%
Revenue Next 2Y0.68%
Revenue Next 3Y1.13%
Revenue Next 5Y0.4%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ERCB is valuated quite expensively with a Price/Earnings ratio of 35.06.
Based on the Price/Earnings ratio, ERCB is valued a bit cheaper than the industry average as 68.00% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.47. ERCB is valued slightly more expensive when compared to this.
ERCB is valuated correctly with a Price/Forward Earnings ratio of 12.28.
Based on the Price/Forward Earnings ratio, ERCB is valued cheaply inside the industry as 84.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.91, ERCB is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.06 | ||
| Fwd PE | 12.28 |
4.2 Price Multiples
92.00% of the companies in the same industry are more expensive than ERCB, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ERCB is valued cheaply inside the industry as 88.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.25 | ||
| EV/EBITDA | 6.65 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as ERCB's earnings are expected to grow with 58.42% in the coming years.
PEG (NY)0.13
PEG (5Y)N/A
EPS Next 2Y93.12%
EPS Next 3Y58.42%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.47%.
Compared to an average industry Dividend Yield of 5.67, ERCB pays a better dividend. On top of this ERCB pays more dividend than 92.00% of the companies listed in the same industry.
ERCB's Dividend Yield is a higher than the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.47% |
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
ERCB pays out 573.48% of its income as dividend. This is not a sustainable payout ratio.
ERCB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP573.48%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
FRA:ERCB (7/10/2025, 7:00:00 PM)
7.012
+0.02 (+0.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners46.79%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap23.37B
Analysts56.55
Price Target7.5 (6.96%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.47% |
Yearly Dividend0.24
Dividend Growth(5Y)22.02%
DP573.48%
Div Incr Years1
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)19.55%
Min EPS beat(2)-10.72%
Max EPS beat(2)49.81%
EPS beat(4)2
Avg EPS beat(4)-132.41%
Min EPS beat(4)-588.91%
Max EPS beat(4)49.81%
EPS beat(8)6
Avg EPS beat(8)-35.54%
EPS beat(12)7
Avg EPS beat(12)-21.49%
EPS beat(16)9
Avg EPS beat(16)-14.64%
Revenue beat(2)0
Avg Revenue beat(2)-1.28%
Min Revenue beat(2)-2.1%
Max Revenue beat(2)-0.45%
Revenue beat(4)1
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-2.1%
Max Revenue beat(4)1.67%
Revenue beat(8)1
Avg Revenue beat(8)-1.78%
Revenue beat(12)5
Avg Revenue beat(12)-0.75%
Revenue beat(16)7
Avg Revenue beat(16)-0.79%
PT rev (1m)-1.16%
PT rev (3m)-5%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)30.66%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.37%
Revenue NQ rev (1m)-0.41%
Revenue NQ rev (3m)-3.19%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.06 | ||
| Fwd PE | 12.28 | ||
| P/S | 1.04 | ||
| P/FCF | 6.25 | ||
| P/OCF | 5.72 | ||
| P/B | 3.03 | ||
| P/tB | 11.26 | ||
| EV/EBITDA | 6.65 |
EPS(TTM)0.2
EY2.85%
EPS(NY)0.57
Fwd EY8.15%
FCF(TTM)1.12
FCFY15.99%
OCF(TTM)1.23
OCFY17.47%
SpS6.71
BVpS2.31
TBVpS0.62
PEG (NY)0.13
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.58% | ||
| ROE | 1.87% | ||
| ROCE | 18.28% | ||
| ROIC | 12.87% | ||
| ROICexc | 19.49% | ||
| ROICexgc | 55.79% | ||
| OM | 10.72% | ||
| PM (TTM) | 0.65% | ||
| GM | 46.21% | ||
| FCFM | 16.7% |
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%
ROICexcg growth 3Y9.12%
ROICexcg 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-Score7
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.02 | ||
| Debt/EBITDA | 0.94 | ||
| Cap/Depr | 36.59% | ||
| Cap/Sales | 1.55% | ||
| Interest Coverage | 10.63 | ||
| Cash Conversion | 122.12% | ||
| Profit Quality | 2589.32% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z | N/A |
F-Score7
WACC5.59%
ROIC/WACC2.3
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)-46.92%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%60.24%
EPS Next Y267.53%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
EPS Next 5Y29.89%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%3.19%
Revenue Next Year0.35%
Revenue Next 2Y0.68%
Revenue Next 3Y1.13%
Revenue Next 5Y0.4%
EBIT growth 1Y48.21%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year84.47%
EBIT Next 3Y23.21%
EBIT Next 5Y11.76%
FCF growth 1Y126.71%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y82.12%
OCF growth 3Y5.8%
OCF growth 5Y22.35%