ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
FRA:ERCB - Deutsche Boerse Ag - SE0000108656 - Common Stock - Currency: EUR
We assign a fundamental rating of 5 out of 10 to ERCB. ERCB was compared to 25 industry peers in the Communications Equipment industry. ERCB has an average financial health and profitability rating. ERCB is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
ERCB had positive earnings in the past year.
In the past year ERCB had a positive cash flow from operations.
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
The Return On Assets of ERCB (-0.50%) is better than 64.00% of its industry peers.
With a decent Return On Equity value of -1.58%, ERCB is doing good in the industry, outperforming 64.00% of the companies in the same industry.
With an excellent Return On Invested Capital value of 9.24%, ERCB belongs to the best of the industry, outperforming 88.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.5% | ||
| ROE | -1.58% | ||
| ROIC | 9.24% |
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
ERCB's Profit Margin has declined in the last couple of years.
ERCB has a Operating Margin of 8.16%. This is in the better half of the industry: ERCB outperforms 76.00% of its industry peers.
ERCB's Operating Margin has declined in the last couple of years.
ERCB's Gross Margin of 43.44% is in line compared to the rest of the industry. ERCB outperforms 44.00% of its industry peers.
ERCB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.16% | ||
| PM (TTM) | N/A | ||
| GM | 43.44% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERCB is still 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 1.11. This is a very positive value and a sign of high solvency as it would only need 1.11 years to pay back of all of its debts.
The Debt to FCF ratio of ERCB (1.11) is better than 88.00% of its industry peers.
ERCB has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ERCB (0.44) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.11 | ||
| Altman-Z | N/A |
ROIC/WACC1.35
WACC6.84%
2.3 Liquidity
A Current Ratio of 1.19 indicates that ERCB should not have too much problems paying its short term obligations.
With a Current ratio value of 1.19, ERCB is not doing good in the industry: 80.00% of the companies in the same industry are doing better.
ERCB has a Quick Ratio of 1.19. 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 0.95 is on the low side compared to the rest of the industry. ERCB is outperformed by 68.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
ERCB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -60.46%.
ERCB shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
ERCB shows a decrease in Revenue. In the last year, the revenue decreased by -5.87%.
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)-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
Based on estimates for the next years, ERCB will show a very strong growth in Earnings Per Share. The EPS will grow by 45.47% on average per year.
ERCB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.46% yearly.
EPS Next Y292.93%
EPS Next 2Y100.23%
EPS Next 3Y66.47%
EPS Next 5Y45.47%
Revenue Next Year3.62%
Revenue Next 2Y3.08%
Revenue Next 3Y1.98%
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 48.69, which means the current valuation is very expensive for ERCB.
Compared to the rest of the industry, the Price/Earnings ratio of ERCB indicates a somewhat cheap valuation: ERCB is cheaper than 68.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.47, ERCB is valued quite expensively.
The Price/Forward Earnings ratio is 12.43, which indicates a correct valuation of ERCB.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 92.00% of the companies listed in the same industry.
ERCB is valuated cheaply when we compare the Price/Forward Earnings ratio to 92.74, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.69 | ||
| Fwd PE | 12.43 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCB is valued a bit cheaper than the industry average as 68.00% of the companies are valued more expensively.
ERCB's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ERCB is cheaper than 88.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.07 | ||
| EV/EBITDA | 8.5 |
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.
A more expensive valuation may be justified as ERCB's earnings are expected to grow with 66.47% in the coming years.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y100.23%
EPS Next 3Y66.47%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.16%. 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 3.61. ERCB pays more dividend than 92.00% of the companies in the same industry.
ERCB's Dividend Yield is a higher than the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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
The earnings of ERCB are negative and hence is the payout ratio. ERCB will probably not be able to sustain this dividend level.
The dividend of ERCB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-667.4%
EPS Next 2Y100.23%
EPS Next 3Y66.47%
ERICSSON LM-B SHS
FRA:ERCB (2/4/2025, 7:00:00 PM)
7.304
+0.01 (+0.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners40.83%
Inst Owner ChangeN/A
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap24.34B
Analysts55.17
Price Target7.54 (3.23%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
Yearly Dividend2.7
Dividend Growth(5Y)21.64%
DP-667.4%
Div Incr Years4
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-284.38%
Min EPS beat(2)-588.91%
Max EPS beat(2)20.16%
EPS beat(4)3
Avg EPS beat(4)-94.09%
Min EPS beat(4)-588.91%
Max EPS beat(4)160.39%
EPS beat(8)6
Avg EPS beat(8)-34.73%
EPS beat(12)7
Avg EPS beat(12)-23.13%
EPS beat(16)9
Avg EPS beat(16)-15.73%
Revenue beat(2)1
Avg Revenue beat(2)0.49%
Min Revenue beat(2)-0.69%
Max Revenue beat(2)1.67%
Revenue beat(4)1
Avg Revenue beat(4)-2.16%
Min Revenue beat(4)-7.15%
Max Revenue beat(4)1.67%
Revenue beat(8)3
Avg Revenue beat(8)-1.03%
Revenue beat(12)7
Avg Revenue beat(12)-0.09%
Revenue beat(16)8
Avg Revenue beat(16)-1.07%
PT rev (1m)4.38%
PT rev (3m)8.94%
EPS NQ rev (1m)-1.85%
EPS NQ rev (3m)-1.85%
EPS NY rev (1m)4.29%
EPS NY rev (3m)4.29%
Revenue NQ rev (1m)0.32%
Revenue NQ rev (3m)0.32%
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.69 | ||
| Fwd PE | 12.43 | ||
| P/S | 1.13 | ||
| P/FCF | 7.07 | ||
| P/OCF | 6.43 | ||
| P/B | 3.21 | ||
| P/tB | 12.61 | ||
| EV/EBITDA | 8.5 |
EPS(TTM)0.15
EY2.05%
EPS(NY)0.59
Fwd EY8.05%
FCF(TTM)1.03
FCFY14.15%
OCF(TTM)1.14
OCFY15.56%
SpS6.49
BVpS2.28
TBVpS0.58
PEG (NY)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.5% | ||
| ROE | -1.58% | ||
| ROCE | 13.12% | ||
| ROIC | 9.24% | ||
| ROICexc | 13.36% | ||
| ROICexgc | 34.12% | ||
| OM | 8.16% | ||
| PM (TTM) | N/A | ||
| GM | 43.44% | ||
| FCFM | 15.92% |
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-Score4
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.11 | ||
| Debt/EBITDA | 1.23 | ||
| Cap/Depr | 36.02% | ||
| Cap/Sales | 1.59% | ||
| Interest Coverage | 6.62 | ||
| Cash Conversion | 139.28% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | N/A |
F-Score4
WACC6.84%
ROIC/WACC1.35
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 Y292.93%
EPS Next 2Y100.23%
EPS Next 3Y66.47%
EPS Next 5Y45.47%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%1.44%
Revenue Next Year3.62%
Revenue Next 2Y3.08%
Revenue Next 3Y1.98%
Revenue Next 5Y4.46%
EBIT growth 1Y-13.58%
EBIT growth 3Y-35.01%
EBIT growth 5Y-3.88%
EBIT Next Year72.82%
EBIT Next 3Y28.77%
EBIT Next 5Y15.89%
FCF growth 1Y536.89%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y243.37%
OCF growth 3Y5.8%
OCF growth 5Y22.35%