ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.11 EUR
+0.04 (+0.47%)
Taking everything into account, ERCB scores 6 out of 10 in our fundamental rating. ERCB was compared to 32 industry peers in the Communications Equipment industry. ERCB has an excellent profitability rating, but there are some minor concerns on its financial health. ERCB may be a bit undervalued, certainly considering the very reasonable score on growth 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
- ERCB has a Return On Assets of 8.72%. This is amongst the best in the industry. ERCB outperforms 87.50% of its industry peers.
- ERCB has a better Return On Equity (24.01%) than 93.75% of its industry peers.
- ERCB's Return On Invested Capital of 13.55% is amongst the best of the industry. ERCB outperforms 87.50% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ERCB 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
- ERCB's Profit Margin of 10.26% is amongst the best of the industry. ERCB outperforms 84.38% of its industry peers.
- ERCB's Profit Margin has declined in the last couple of years.
- ERCB has a better Operating Margin (12.97%) than 81.25% of its industry peers.
- 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 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.
- Compared to 1 year ago, ERCB has about the same amount of shares outstanding.
- The number of shares outstanding for ERCB has been increased compared to 5 years ago.
- ERCB has a better debt/assets ratio than last year.
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 81.25% 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.
- Looking at the Debt to Equity ratio, with a value of 0.35, ERCB is in line with its industry, outperforming 56.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.78
WACC7.62%
2.3 Liquidity
- ERCB has a Current Ratio of 1.17. This is a normal value and indicates that ERCB is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.17, ERCB is doing worse than 71.88% of the companies in the same industry.
- A Quick Ratio of 0.94 indicates that ERCB may have some problems paying its short term obligations.
- ERCB's Quick ratio of 0.94 is on the low side compared to the rest of the industry. ERCB is outperformed by 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
- The Revenue has decreased by -2.65% in the past year.
- 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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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
- Based on the Price/Earnings ratio of 10.27, the valuation of ERCB can be described as reasonable.
- 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.
- Compared to an average S&P500 Price/Earnings ratio of 27.33, ERCB is valued rather cheaply.
- A Price/Forward Earnings ratio of 13.08 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 87.50% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of ERCB to the average of the S&P500 Index (24.12), we can say ERCB is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.27 | ||
| Fwd PE | 13.08 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaper than 93.75% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 81.25% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.53 | ||
| EV/EBITDA | 6.72 |
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.
- ERCB has an outstanding profitability rating, which may justify a higher PE ratio.
- ERCB's earnings are expected to grow with 58.79% in the coming years. This may justify a more expensive valuation.
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%.
- Compared to an average industry Dividend Yield of 2.52, ERCB pays a better dividend. On top of this ERCB pays more dividend than 93.75% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.91, ERCB pays a better dividend.
| 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.
- ERCB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.84%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
FRA:ERCB (1/13/2026, 7:00:00 PM)
8.11
+0.04 (+0.47%)
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 Cap27.03B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target8.05 (-0.74%)
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 | 10.27 | ||
| Fwd PE | 13.08 | ||
| 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
EY9.74%
EPS(NY)0.62
Fwd EY7.64%
FCF(TTM)0.85
FCFY10.5%
OCF(TTM)0.95
OCFY11.73%
SpS6.73
BVpS2.87
TBVpS1.26
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 10.27 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.