ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - FRA:ERCB - SE0000108656 - Common Stock
8.498 EUR
-0.05 (-0.56%)
We assign a fundamental rating of 6 out of 10 to ERCB. ERCB was compared to 27 industry peers in the Communications Equipment industry. While ERCB has a great profitability rating, there are some minor concerns on its financial health. ERCB may be a bit undervalued, certainly considering the very reasonable score on growth Finally ERCB also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ERCB had positive earnings in the past year.
ERCB had a positive operating cash flow in the past year.
Of the past 5 years ERCB 4 years were profitable.
ERCB had a positive operating cash flow in each 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 85.19% of its industry peers.
The Return On Equity of ERCB (24.01%) is better than 88.89% of its industry peers.
ERCB has a Return On Invested Capital of 13.55%. This is amongst the best in the industry. ERCB outperforms 88.89% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ERCB is in line with the industry average of 10.70%.
The 3 year average ROIC (9.43%) for ERCB is below the current ROIC(13.55%), indicating increased profibility in the last year.
| 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 85.19% 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 81.48% of its industry peers.
ERCB's Operating Margin has improved in the last couple of years.
ERCB has a Gross Margin (47.62%) which is in line with 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ERCB is creating value.
ERCB has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for ERCB has been increased compared to 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 1.45. 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 85.19% 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.
ERCB has a Debt to Equity ratio (0.35) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.28
WACC5.93%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERCB should not have too much problems paying its short term obligations.
With a Current ratio value of 1.17, ERCB is not doing good in the industry: 77.78% of the companies in the same industry are doing better.
A Quick Ratio of 0.94 indicates that ERCB may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.94, ERCB is doing worse than 66.67% 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.
Looking at the last year, ERCB shows a decrease in Revenue. The Revenue has decreased by -2.65% in the last 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
Based on estimates for the next years, ERCB will show a very strong growth in Earnings Per Share. The EPS will grow by 29.10% on average per year.
Based on estimates for the next years, ERCB will show a decrease in Revenue. The Revenue will decrease by -0.77% on average per year.
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
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.
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
ERCB is valuated reasonably with a Price/Earnings ratio of 11.04.
Based on the Price/Earnings ratio, ERCB is valued cheaper than 96.30% of the companies in the same industry.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (25.83), we can say ERCB is valued rather cheaply.
With a Price/Forward Earnings ratio of 15.24, ERCB is valued correctly.
85.19% of the companies in the same industry are more expensive than ERCB, based on the Price/Forward Earnings ratio.
ERCB is valuated cheaply when we compare the Price/Forward Earnings ratio to 32.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.04 | ||
| Fwd PE | 15.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaper than 85.19% of the companies in the same industry.
ERCB's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERCB is cheaper than 74.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.24 | ||
| EV/EBITDA | 7.25 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent 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 55.91% in the coming years.
PEG (NY)0.04
PEG (5Y)N/A
EPS Next 2Y89.39%
EPS Next 3Y55.91%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 2.95%.
Compared to an average industry Dividend Yield of 5.15, ERCB pays a better dividend. On top of this ERCB pays more dividend than 92.59% of the companies listed in the same industry.
ERCB's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
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.
ERCB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.84%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
FRA:ERCB (11/6/2025, 7:00:00 PM)
8.498
-0.05 (-0.56%)
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 Cap28.33B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target7.91 (-6.92%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
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)10.12%
PT rev (3m)18.72%
EPS NQ rev (1m)14.08%
EPS NQ rev (3m)14.08%
EPS NY rev (1m)0%
EPS NY rev (3m)1.18%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.47%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.04 | ||
| Fwd PE | 15.24 | ||
| P/S | 1.3 | ||
| P/FCF | 10.24 | ||
| P/OCF | 9.17 | ||
| P/B | 3.03 | ||
| P/tB | 6.94 | ||
| EV/EBITDA | 7.25 |
EPS(TTM)0.77
EY9.06%
EPS(NY)0.56
Fwd EY6.56%
FCF(TTM)0.83
FCFY9.77%
OCF(TTM)0.93
OCFY10.91%
SpS6.56
BVpS2.8
TBVpS1.22
PEG (NY)0.04
PEG (5Y)N/A
Graham Number6.97
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
WACC5.93%
ROIC/WACC2.28
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 Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y13.49%
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 9 / 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 271.88% in the next year.