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
Taking everything into account, ERCB scores 5 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. ERCB has a bad growth rate and is valued cheaply. Finally 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.
- The reported net income has been mixed in the past 5 years: ERCB reported negative net income in multiple years.
- ERCB had a positive operating cash flow in 4 of the past 5 years.
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 has a better Return On Invested Capital (13.55%) than 90.32% of its industry peers.
- 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 10.63%.
- 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
- ERCB has a better Profit Margin (10.26%) than 87.10% of its industry peers.
- In the last couple of years the Profit Margin of ERCB has declined.
- ERCB's Operating Margin of 12.97% is amongst the best of the industry. ERCB outperforms 83.87% of its industry peers.
- In the last couple of years the Operating Margin of ERCB has grown nicely.
- The Gross Margin of ERCB (47.62%) is better than 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
- ERCB has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- There is no outstanding debt for ERCB. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and 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.
- ERCB's Debt to FCF ratio of 1.45 is amongst the best of the industry. ERCB outperforms 83.87% of its industry peers.
- A Debt/Equity ratio of 0.35 indicates that ERCB is not too dependend on debt financing.
- ERCB's Debt to Equity ratio of 0.35 is in line compared to the rest of the industry. ERCB outperforms 58.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.76
WACC7.68%
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 70.97% 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.
- With a Quick ratio value of 0.94, ERCB is not doing good in the industry: 64.52% of the companies in the same industry are doing better.
| 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
- The Earnings Per Share is expected to decrease by -10.81% on average over the next years. This is quite bad
- 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
- When comparing the EPS 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
- A Price/Earnings ratio of 11.05 indicates a reasonable valuation of ERCB.
- Based on the Price/Earnings ratio, ERCB is valued cheaply inside the industry as 96.77% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (28.30), we can say ERCB is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 14.44, the valuation of ERCB can be described as correct.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 90.32% of the companies listed in the same industry.
- ERCB's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.05 | ||
| Fwd PE | 14.44 |
4.2 Price Multiples
- 90.32% of the companies in the same industry are more expensive than ERCB, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, ERCB is valued 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
- ERCB has a Yearly Dividend Yield of 3.32%.
- 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 | 3.32% |
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.
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.