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 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 is valued quite cheap, but it does not seem to be growing. Finally 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.
- In the past 5 years ERCB always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 10.18%, ERCB belongs to the best of the industry, outperforming 87.10% of the companies in the same industry.
- The Return On Equity of ERCB (25.95%) is better than 96.77% of its industry peers.
- ERCB has a better Return On Invested Capital (8.85%) than 74.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.18% | ||
| ROE | 25.95% | ||
| ROIC | 8.85% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- ERCB's Profit Margin of 12.01% is amongst the best of the industry. ERCB outperforms 87.10% of its industry peers.
- ERCB's Profit Margin has improved in the last couple of years.
- The Operating Margin of ERCB (14.08%) is better than 83.87% of its industry peers.
- ERCB's Operating Margin has improved in the last couple of years.
- ERCB has a Gross Margin of 48.14%. This is in the better half of the industry: ERCB outperforms 61.29% of its industry peers.
- In the last couple of years the Gross Margin of ERCB has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.08% | ||
| PM (TTM) | 12.01% | ||
| GM | 48.14% |
OM growth 3Y7.92%
OM growth 5Y2.1%
PM growth 3Y20.32%
PM growth 5Y9.81%
GM growth 3Y4.83%
GM growth 5Y3.45%
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.
- ERCB has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- ERCB has a debt to FCF ratio of 1.38. This is a very positive value and a sign of high solvency as it would only need 1.38 years to pay back of all of its debts.
- ERCB has a better Debt to FCF ratio (1.38) than 83.87% of its industry peers.
- ERCB has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
- ERCB has a Debt to Equity ratio (0.32) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.38 | ||
| Altman-Z | N/A |
ROIC/WACC1.02
WACC8.7%
2.3 Liquidity
- A Current Ratio of 1.29 indicates that ERCB should not have too much problems paying its short term obligations.
- ERCB's Current ratio of 1.29 is on the low side compared to the rest of the industry. ERCB is outperformed by 67.74% of its industry peers.
- ERCB has a Quick Ratio of 1.08. 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 Quick ratio, with a value of 1.08, ERCB is doing worse than 61.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 413.40% over the past year.
- Measured over the past years, ERCB shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.51% on average per year.
- Looking at the last year, ERCB shows a decrease in Revenue. The Revenue has decreased by -4.52% in the last year.
- Measured over the past years, ERCB shows a small growth in Revenue. The Revenue has been growing by 0.37% on average per year.
EPS 1Y (TTM)413.4%
EPS 3Y11.79%
EPS 5Y8.51%
EPS Q2Q%15.04%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y-4.48%
Revenue growth 5Y0.37%
Sales Q2Q%-8.73%
3.2 Future
- Based on estimates for the next years, ERCB will show a very negative growth in Earnings Per Share. The EPS will decrease by -10.81% on average per year.
- 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
- The EPS growth rate is decreasing: in the next years the growth will be less 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 11.05 indicates a reasonable valuation of ERCB.
- ERCB's Price/Earnings ratio is rather cheap when compared to the industry. ERCB is cheaper than 96.77% of the companies in the same industry.
- ERCB's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.32.
- The Price/Forward Earnings ratio is 14.38, which 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 90.32% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, ERCB is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.05 | ||
| Fwd PE | 14.38 |
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 90.32% of the companies listed in the same industry.
- 80.65% of the companies in the same industry are more expensive than ERCB, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.02 | ||
| EV/EBITDA | 6.87 |
4.3 Compensation for Growth
- The excellent profitability rating of ERCB 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 3.12%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.64, ERCB pays a better dividend. On top of this ERCB pays more dividend than 93.55% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, ERCB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
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
- 33.58% of the earnings are spent on dividend by ERCB. This is a low number and sustainable payout ratio.
DP33.58%
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 2.94.
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.