ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.104 EUR
-0.01 (-0.07%)
ERCB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 32 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. ERCB scores decently on growth, while it is valued quite cheap. This could make an interesting combination. ERCB also has an excellent dividend rating.
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 8.72%, ERCB belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 24.01%, ERCB belongs to the top of the industry, outperforming 93.75% of the companies in the same industry.
- ERCB has a Return On Invested Capital of 13.55%. This is amongst the best in the industry. ERCB outperforms 87.50% of its industry peers.
- ERCB had an Average Return On Invested Capital over the past 3 years of 9.43%. This is below the industry average of 11.49%.
- 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
- The Profit Margin of ERCB (10.26%) is better than 84.38% of its industry peers.
- In the last couple of years the Profit Margin of ERCB has declined.
- The Operating Margin of ERCB (12.97%) is better than 81.25% of its industry peers.
- ERCB's Operating Margin has improved in the last couple of years.
- ERCB has a better Gross Margin (47.62%) than 62.50% of its industry peers.
- ERCB's Gross Margin has improved in the last couple of years.
| 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 about the same amout of shares outstanding than it did 1 year ago.
- ERCB has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for ERCB has been reduced compared to a year ago.
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 81.25% 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.
- ERCB's Debt to Equity ratio of 0.35 is in line compared to the rest of the industry. ERCB outperforms 56.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.78
WACC7.62%
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 worse Current ratio (1.17) than 71.88% 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.
- ERCB has a worse Quick ratio (0.94) than 65.63% 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.
- The earnings per share for ERCB have been decreasing by -17.01% on average. This is quite bad
- ERCB shows a decrease in Revenue. In the last year, the revenue decreased by -2.65%.
- 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
- ERCB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.52% yearly.
- Based on estimates for the next years, ERCB will show a decrease in Revenue. The Revenue will decrease by -1.48% on average per year.
EPS Next Y352.29%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
EPS Next 5Y29.52%
Revenue Next Year-5.09%
Revenue Next 2Y-2.77%
Revenue Next 3Y-1.19%
Revenue Next 5Y-1.47%
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
- A Price/Earnings ratio of 10.26 indicates a reasonable 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 96.88% 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 27.54.
- ERCB is valuated correctly with a Price/Forward Earnings ratio of 13.09.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 87.50% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.31. ERCB is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.26 | ||
| Fwd PE | 13.09 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaply inside the industry as 93.75% 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 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.53 | ||
| EV/EBITDA | 6.72 |
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 an outstanding 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 58.79% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y97.18%
EPS Next 3Y58.79%
5. Dividend
5.1 Amount
- ERCB has a Yearly Dividend Yield of 3.27%. 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 2.52. ERCB pays more dividend than 93.75% of the companies in the same industry.
- ERCB's Dividend Yield is rather good when compared to the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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 2Y97.18%
EPS Next 3Y58.79%
FRA:ERCB (1/14/2026, 7:00:00 PM)
8.104
-0.01 (-0.07%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)10-14 2025-10-14/bmo
Earnings (Next)01-23 2026-01-23/amc
Inst Owners56.85%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap27.01B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target8.05 (-0.67%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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)1.06%
PT rev (3m)13.11%
EPS NQ rev (1m)-2.91%
EPS NQ rev (3m)10.76%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)21.62%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-1.34%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.26 | ||
| Fwd PE | 13.09 | ||
| P/S | 1.21 | ||
| P/FCF | 9.53 | ||
| P/OCF | 8.53 | ||
| P/B | 2.82 | ||
| P/tB | 6.46 | ||
| EV/EBITDA | 6.72 |
EPS(TTM)0.79
EY9.75%
EPS(NY)0.62
Fwd EY7.64%
FCF(TTM)0.85
FCFY10.5%
OCF(TTM)0.95
OCFY11.72%
SpS6.72
BVpS2.87
TBVpS1.25
PEG (NY)0.03
PEG (5Y)N/A
Graham Number7.15
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
WACC7.62%
ROIC/WACC1.78
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 Y352.29%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
EPS Next 5Y29.52%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-5.09%
Revenue Next 2Y-2.77%
Revenue Next 3Y-1.19%
Revenue Next 5Y-1.47%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year112.01%
EBIT Next 3Y21.84%
EBIT Next 5Y14.41%
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 for ERCB stock?
ChartMill assigns a valuation rating of 9 / 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 10.26 and the Price/Book (PB) ratio is 2.82.
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.