ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - FRA:ERCB - SE0000108656 - Common Stock
6.804 EUR
+0.07 (+1.01%)
Taking everything into account, ERCB scores 6 out of 10 in our fundamental rating. ERCB was compared to 27 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 valued quite cheap, while showing a decent growth score. This is a good combination! 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.
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
ERCB's Return On Assets of 6.40% is fine compared to the rest of the industry. ERCB outperforms 77.78% of its industry peers.
With an excellent Return On Equity value of 19.95%, ERCB belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
With an excellent Return On Invested Capital value of 14.40%, ERCB belongs to the best of the industry, outperforming 88.89% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERCB is below the industry average of 11.62%.
The last Return On Invested Capital (14.40%) for ERCB is above the 3 year average (9.43%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.4% | ||
| ROE | 19.95% | ||
| ROIC | 14.4% |
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 (7.04%) is better than 77.78% of its industry peers.
ERCB's Profit Margin has declined in the last couple of years.
ERCB has a better Operating Margin (12.47%) than 85.19% of its industry peers.
ERCB's Operating Margin has improved in the last couple of years.
ERCB's Gross Margin of 47.18% is in line compared to the rest of the industry. ERCB outperforms 59.26% of its industry peers.
In the last couple of years the Gross Margin of ERCB has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.47% | ||
| PM (TTM) | 7.04% | ||
| GM | 47.18% |
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 well above the Cost of Capital (WACC), which means it is creating 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.
Compared to 1 year ago, ERCB has an improved debt to assets ratio.
2.2 Solvency
ERCB has a debt to FCF ratio of 1.13. This is a very positive value and a sign of high solvency as it would only need 1.13 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.13, ERCB belongs to the top of the industry, outperforming 81.48% of the companies in the same industry.
A Debt/Equity ratio of 0.40 indicates that ERCB is not too dependend on debt financing.
ERCB's Debt to Equity ratio of 0.40 is in line compared to the rest of the industry. ERCB outperforms 55.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.13 | ||
| Altman-Z | N/A |
ROIC/WACC2.5
WACC5.76%
2.3 Liquidity
ERCB has a Current Ratio of 1.09. 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 1.09, ERCB is doing worse than 81.48% of the companies in the same industry.
ERCB has a Quick Ratio of 1.09. 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's Quick ratio of 0.86 is on the low side compared to the rest of the industry. ERCB is outperformed by 81.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
ERCB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 1007.02%, which is quite impressive.
Measured over the past years, ERCB shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -17.01% on average per year.
ERCB shows a decrease in Revenue. In the last year, the revenue decreased by -1.47%.
ERCB shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.76% yearly.
EPS 1Y (TTM)1007.02%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%154.7%
Revenue 1Y (TTM)-1.47%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-6.21%
3.2 Future
ERCB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.53% yearly.
Based on estimates for the next years, ERCB will show a decrease in Revenue. The Revenue will decrease by -0.57% on average per year.
EPS Next Y275.82%
EPS Next 2Y91.37%
EPS Next 3Y57.57%
EPS Next 5Y29.53%
Revenue Next Year-3.47%
Revenue Next 2Y-1.38%
Revenue Next 3Y-0.56%
Revenue Next 5Y-0.57%
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 11.34, the valuation of ERCB can be described as reasonable.
96.30% of the companies in the same industry are more expensive than ERCB, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (27.20), we can say ERCB is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 11.93, the valuation of ERCB can be described as reasonable.
81.48% of the companies in the same industry are more expensive than ERCB, based on the Price/Forward Earnings ratio.
ERCB is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.34 | ||
| Fwd PE | 11.93 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 92.59% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ERCB is valued cheaply inside the industry as 85.19% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.4 | ||
| EV/EBITDA | 6.53 |
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.
The decent profitability rating of ERCB may justify a higher PE ratio.
A more expensive valuation may be justified as ERCB's earnings are expected to grow with 57.57% in the coming years.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y91.37%
EPS Next 3Y57.57%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.80%, 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 6.04. ERCB pays more dividend than 92.59% of the companies in the same industry.
ERCB's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.8% |
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
53.91% of the earnings are spent on dividend by ERCB. This is a bit on the high side, but may be sustainable.
ERCB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP53.91%
EPS Next 2Y91.37%
EPS Next 3Y57.57%
FRA:ERCB (9/17/2025, 7:00:00 PM)
6.804
+0.07 (+1.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners46.79%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap22.68B
Analysts56.43
Price Target7.18 (5.53%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.8% |
Yearly Dividend0.25
Dividend Growth(5Y)22.02%
DP53.91%
Div Incr Years1
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)35.22%
Min EPS beat(2)20.62%
Max EPS beat(2)49.81%
EPS beat(4)3
Avg EPS beat(4)19.97%
Min EPS beat(4)-10.72%
Max EPS beat(4)49.81%
EPS beat(8)6
Avg EPS beat(8)-36.77%
EPS beat(12)8
Avg EPS beat(12)-18.24%
EPS beat(16)10
Avg EPS beat(16)-12.96%
Revenue beat(2)0
Avg Revenue beat(2)-4.24%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-2.1%
Revenue beat(4)0
Avg Revenue beat(4)-2.41%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.58%
Revenue beat(12)4
Avg Revenue beat(12)-1.33%
Revenue beat(16)7
Avg Revenue beat(16)-0.89%
PT rev (1m)0.41%
PT rev (3m)-5.6%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-19.57%
EPS NY rev (1m)2.26%
EPS NY rev (3m)2.26%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)-9.97%
Revenue NY rev (1m)-0.22%
Revenue NY rev (3m)-3.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.34 | ||
| Fwd PE | 11.93 | ||
| P/S | 1.01 | ||
| P/FCF | 6.4 | ||
| P/OCF | 5.86 | ||
| P/B | 2.87 | ||
| P/tB | 9.24 | ||
| EV/EBITDA | 6.53 |
EPS(TTM)0.6
EY8.82%
EPS(NY)0.57
Fwd EY8.39%
FCF(TTM)1.06
FCFY15.61%
OCF(TTM)1.16
OCFY17.05%
SpS6.73
BVpS2.37
TBVpS0.74
PEG (NY)0.04
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.4% | ||
| ROE | 19.95% | ||
| ROCE | 20.46% | ||
| ROIC | 14.4% | ||
| ROICexc | 19.72% | ||
| ROICexgc | 43.53% | ||
| OM | 12.47% | ||
| PM (TTM) | 7.04% | ||
| GM | 47.18% | ||
| FCFM | 15.79% |
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%
ROICexcg growth 3Y9.12%
ROICexcg 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-Score7
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 1.13 | ||
| Debt/EBITDA | 0.92 | ||
| Cap/Depr | 52.07% | ||
| Cap/Sales | 1.46% | ||
| Interest Coverage | 12.07 | ||
| Cash Conversion | 112.98% | ||
| Profit Quality | 224.29% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.86 | ||
| Altman-Z | N/A |
F-Score7
WACC5.76%
ROIC/WACC2.5
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)1007.02%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%154.7%
EPS Next Y275.82%
EPS Next 2Y91.37%
EPS Next 3Y57.57%
EPS Next 5Y29.53%
Revenue 1Y (TTM)-1.47%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-6.21%
Revenue Next Year-3.47%
Revenue Next 2Y-1.38%
Revenue Next 3Y-0.56%
Revenue Next 5Y-0.57%
EBIT growth 1Y72.11%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year84.47%
EBIT Next 3Y23.21%
EBIT Next 5Y14%
FCF growth 1Y321.76%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y167.74%
OCF growth 3Y5.8%
OCF growth 5Y22.35%