ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.302 EUR
+0.15 (+1.89%)
ERCB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 28 industry peers in the Communications Equipment industry. While ERCB belongs to the best of the industry regarding profitability, 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.
In the past year ERCB had a positive cash flow from operations.
Of the past 5 years ERCB 4 years were profitable.
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 89.29% of the companies in the same industry.
With an excellent Return On Equity value of 24.01%, ERCB belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.55%, ERCB belongs to the top of the industry, outperforming 89.29% of the companies in the same industry.
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
ERCB's Profit Margin of 10.26% is amongst the best of the industry. ERCB outperforms 89.29% of its industry peers.
ERCB's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 12.97%, ERCB belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
ERCB's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 47.62%, ERCB is in the better half of the industry, outperforming 60.71% 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 | 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ERCB 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
ERCB has a debt to FCF ratio of 1.45. This is a very positive value and a sign of high solvency as it would only need 1.45 years to pay back of all of its debts.
ERCB has a better Debt to FCF ratio (1.45) than 85.71% 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.
With a Debt to Equity ratio value of 0.35, ERCB perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.06
WACC6.59%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERCB should not have too much problems paying its short term obligations.
ERCB has a Current ratio of 1.17. This is in the lower half of the industry: ERCB underperforms 71.43% of its industry peers.
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.
Looking at the Quick ratio, with a value of 0.94, ERCB is doing worse than 64.29% of the companies in the same industry.
| 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.
Looking at the last year, ERCB shows a decrease in Revenue. The Revenue has decreased by -2.65% in the last year.
ERCB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.76% yearly.
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
The Earnings Per Share is expected to grow by 30.35% on average over the next years. This is a very strong growth
Based on estimates for the next years, ERCB will show a decrease in Revenue. The Revenue will decrease by -0.85% on average per year.
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.35%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 10.78, the valuation of ERCB can be described as very reasonable.
ERCB's Price/Earnings ratio is rather cheap when compared to the industry. ERCB is cheaper than 96.43% of the companies in the same industry.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (26.31), we can say ERCB is valued rather cheaply.
A Price/Forward Earnings ratio of 13.79 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 85.71% of the companies listed in the same industry.
ERCB is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.78 | ||
| Fwd PE | 13.79 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaply inside the industry as 89.29% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ERCB is valued a bit cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.98 | ||
| EV/EBITDA | 7.06 |
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.
The excellent profitability rating of ERCB may justify a higher PE ratio.
A more expensive valuation may be justified as ERCB's earnings are expected to grow with 59.26% in the coming years.
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 3.12%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.60, ERCB pays a better dividend. On top of this ERCB pays more dividend than 92.86% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, ERCB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
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 37.84% of its income as dividend. This is a sustainable payout ratio.
ERCB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.84%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
FRA:ERCB (11/28/2025, 7:00:00 PM)
8.302
+0.15 (+1.89%)
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 Cap27.67B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target7.92 (-4.6%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
Yearly Dividend0.25
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)0%
EPS NQ rev (3m)14.08%
EPS NY rev (1m)20.53%
EPS NY rev (3m)19.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.78 | ||
| Fwd PE | 13.79 | ||
| P/S | 1.26 | ||
| P/FCF | 9.98 | ||
| P/OCF | 8.94 | ||
| P/B | 2.96 | ||
| P/tB | 6.77 | ||
| EV/EBITDA | 7.06 |
EPS(TTM)0.77
EY9.27%
EPS(NY)0.6
Fwd EY7.25%
FCF(TTM)0.83
FCFY10.02%
OCF(TTM)0.93
OCFY11.19%
SpS6.57
BVpS2.81
TBVpS1.23
PEG (NY)0.03
PEG (5Y)N/A
Graham Number6.97
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
WACC6.59%
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 5Y30.35%
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-0.85%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y15.14%
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.