ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.29 EUR
+0 (+0.05%)
Taking everything into account, ERCB scores 6 out of 10 in our fundamental rating. ERCB was compared to 31 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. 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.
Each year in the past 5 years ERCB had a positive operating cash flow.
1.2 Ratios
ERCB's Return On Assets of 8.72% is amongst the best of the industry. ERCB outperforms 90.32% of its industry peers.
Looking at the Return On Equity, with a value of 24.01%, ERCB belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
ERCB's Return On Invested Capital of 13.55% is amongst the best of the industry. ERCB outperforms 90.32% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ERCB is in line with the industry average of 9.92%.
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 has a Profit Margin of 10.26%. This is amongst the best in the industry. ERCB outperforms 90.32% of its industry peers.
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 87.10% of the companies in the same industry.
In the last couple of years the Operating Margin of ERCB has grown nicely.
Looking at the Gross Margin, with a value of 47.62%, ERCB is in the better half of the industry, outperforming 67.74% 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 just above the Cost of Capital (WACC), so ERCB is still creating some value.
The number of shares outstanding for ERCB remains at a similar level compared to 1 year ago.
ERCB has more shares outstanding than it did 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.
The Debt to FCF ratio of ERCB (1.45) is better than 87.10% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that ERCB is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.35, ERCB is in line with its industry, outperforming 54.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.77
WACC7.64%
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.
ERCB has a Current ratio of 1.17. This is in the lower half of the industry: ERCB underperforms 74.19% 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 67.74% 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.
ERCB shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
The Revenue has decreased by -2.65% in the past year.
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)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
ERCB is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.85% yearly.
EPS Next Y352.29%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
EPS Next 5Y30.35%
Revenue Next Year-5.09%
Revenue Next 2Y-2.77%
Revenue Next 3Y-1.19%
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
Based on the Price/Earnings ratio of 10.63, 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 96.77% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (26.84), we can say ERCB is valued rather cheaply.
The Price/Forward Earnings ratio is 13.49, 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 87.10% of the companies in the same industry.
ERCB is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.40, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.63 | ||
| Fwd PE | 13.49 |
4.2 Price Multiples
ERCB's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERCB is cheaper than 90.32% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERCB is valued a bit cheaper than the industry average as 77.42% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.82 | ||
| EV/EBITDA | 6.93 |
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.
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 3.18%. 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 2.62. ERCB pays more dividend than 93.55% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, ERCB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
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 (12/29/2025, 7:00:00 PM)
8.29
+0 (+0.05%)
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 Cap27.63B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target8.05 (-2.9%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
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)1.65%
PT rev (3m)12.03%
EPS NQ rev (1m)-2.91%
EPS NQ rev (3m)10.76%
EPS NY rev (1m)0.9%
EPS NY rev (3m)21.62%
Revenue NQ rev (1m)-1.17%
Revenue NQ rev (3m)-1.64%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-1.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.63 | ||
| Fwd PE | 13.49 | ||
| P/S | 1.24 | ||
| P/FCF | 9.82 | ||
| P/OCF | 8.79 | ||
| P/B | 2.91 | ||
| P/tB | 6.66 | ||
| EV/EBITDA | 6.93 |
EPS(TTM)0.78
EY9.41%
EPS(NY)0.61
Fwd EY7.41%
FCF(TTM)0.84
FCFY10.18%
OCF(TTM)0.94
OCFY11.37%
SpS6.67
BVpS2.85
TBVpS1.24
PEG (NY)0.03
PEG (5Y)N/A
Graham Number7.07
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
WACC7.64%
ROIC/WACC1.77
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 5Y30.35%
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-0.85%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year112.01%
EBIT Next 3Y21.84%
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 8 / 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 352.29% in the next year.