ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe • Frankfurt Stock Exchange • FRA:ERCB • SE0000108656
9.168 EUR
+0.06 (+0.66%)
Last: Jan 30, 2026, 07:00 PM
We assign a fundamental rating of 5 out of 10 to ERCB. ERCB was compared to 31 industry peers in the Communications Equipment industry. ERCB has an excellent profitability rating, but there are some minor concerns on its financial health. ERCB is cheap, but on the other hand it scores bad on growth. Finally ERCB also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year ERCB was profitable.
- In the past year ERCB had a positive cash flow from operations.
- Of the past 5 years ERCB 4 years were profitable.
- In the past 5 years ERCB always reported a positive cash flow from operatings.
1.2 Ratios
- ERCB has a Return On Assets of 8.72%. This is amongst the best in the industry. ERCB outperforms 90.32% of its industry peers.
- ERCB's Return On Equity of 24.01% is amongst the best of the industry. ERCB outperforms 96.77% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 13.55%, ERCB belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for ERCB is in line with the industry average of 10.63%.
- The last Return On Invested Capital (13.55%) for ERCB is above the 3 year average (9.43%), which is a sign of increasing profitability.
| 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 87.10% of the companies in the same industry.
- In the last couple of years the Profit Margin of ERCB has declined.
- Looking at the Operating Margin, with a value of 12.97%, ERCB belongs to the top of the industry, outperforming 83.87% of the companies in the same industry.
- ERCB's Operating Margin has improved in the last couple of years.
- ERCB has a Gross Margin of 47.62%. This is in the better half of the industry: ERCB outperforms 64.52% 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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERCB is still creating some value.
- ERCB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
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.
- With an excellent Debt to FCF ratio value of 1.45, ERCB belongs to the best of the industry, outperforming 83.87% of the companies in the same industry.
- 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/WACC1.56
WACC8.7%
2.3 Liquidity
- A Current Ratio of 1.17 indicates that ERCB should not have too much problems paying its short term obligations.
- ERCB's Current ratio of 1.17 is on the low side compared to the rest of the industry. ERCB is outperformed by 70.97% of its industry peers.
- A Quick Ratio of 0.94 indicates that ERCB may have some problems paying its short term obligations.
- The Quick ratio of ERCB (0.94) is worse than 64.52% 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 413.40%, which is quite impressive.
- The Earnings Per Share has been growing by 8.51% on average over the past years. This is quite good.
EPS 1Y (TTM)413.4%
EPS 3Y11.79%
EPS 5Y8.51%
EPS Q2Q%15.04%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-8.73%
3.2 Future
- Based on estimates for the next years, ERCB will show a very negative growth in Earnings Per Share. The EPS will decrease by -10.81% on average per year.
- ERCB is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.79% yearly.
EPS Next Y-23.51%
EPS Next 2Y-10.55%
EPS Next 3Y-9.63%
EPS Next 5Y-10.81%
Revenue Next Year-0.39%
Revenue Next 2Y0.82%
Revenue Next 3Y0.13%
Revenue Next 5Y-0.79%
3.3 Evolution
- The EPS 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
- The Price/Earnings ratio is 11.05, which indicates a very decent valuation of ERCB.
- Compared to the rest of the industry, the Price/Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 96.77% of the companies listed in the same industry.
- ERCB's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.30.
- The Price/Forward Earnings ratio is 14.44, which indicates a correct valuation of ERCB.
- ERCB's Price/Forward Earnings ratio is rather cheap when compared to the industry. ERCB is cheaper than 90.32% of the companies in the same industry.
- ERCB is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.05 | ||
| Fwd PE | 14.44 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaply inside the industry as 90.32% 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 80.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.62 | ||
| EV/EBITDA | 7.48 |
4.3 Compensation for Growth
- ERCB has an outstanding profitability rating, which may justify a higher PE ratio.
- ERCB's earnings are expected to decrease with -9.63% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.3
EPS Next 2Y-10.55%
EPS Next 3Y-9.63%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.12%, ERCB has a reasonable but not impressive dividend return.
- ERCB's Dividend Yield is rather good when compared to the industry average which is at 2.62. ERCB pays more dividend than 93.55% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, ERCB pays a better dividend.
| 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
- 37.84% of the earnings are spent on dividend by ERCB. This is a low number and sustainable payout ratio.
DP37.84%
EPS Next 2Y-10.55%
EPS Next 3Y-9.63%
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 5 / 10 to ERCB.DE.
What is the valuation status for ERCB stock?
ChartMill assigns a valuation rating of 7 / 10 to ERICSSON LM-B SHS (ERCB.DE). This can be considered as Undervalued.
What is the profitability of ERCB stock?
ERICSSON LM-B SHS (ERCB.DE) has a profitability rating of 8 / 10.
What is the valuation of ERICSSON LM-B SHS based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ERICSSON LM-B SHS (ERCB.DE) is 11.05 and the Price/Book (PB) ratio is 3.14.
What is the financial health of ERICSSON LM-B SHS (ERCB.DE) stock?
The financial health rating of ERICSSON LM-B SHS (ERCB.DE) is 4 / 10.