ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.234 EUR
-0.08 (-0.96%)
Taking everything into account, ERCB scores 6 out of 10 in our fundamental rating. ERCB was compared to 28 industry peers in the Communications Equipment industry. ERCB has an excellent profitability rating, but there are some minor concerns on its financial health. ERCB may be a bit undervalued, certainly considering the very reasonable score on growth 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.
ERCB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERCB has a Return On Assets of 8.72%. This is amongst the best in the industry. ERCB outperforms 89.29% of its industry peers.
With an excellent Return On Equity value of 24.01%, ERCB belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.55%, ERCB belongs to the best of the industry, outperforming 89.29% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ERCB is in line with the industry average of 10.09%.
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
With an excellent Profit Margin value of 10.26%, ERCB belongs to the best of the industry, outperforming 89.29% of the companies in the same industry.
ERCB's Profit Margin has declined in the last couple of years.
ERCB has a Operating Margin of 12.97%. This is amongst the best in the industry. ERCB outperforms 85.71% of its industry peers.
In the last couple of years the Operating Margin of ERCB has grown nicely.
With a decent Gross Margin value of 47.62%, ERCB is doing good in the industry, outperforming 60.71% of the companies in the same industry.
ERCB's Gross Margin has improved in the last couple of years.
| 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 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.
The number of shares outstanding for ERCB has been increased compared to 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.
Looking at the Debt to FCF ratio, with a value of 1.45, ERCB belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
A Debt/Equity ratio of 0.35 indicates that ERCB is not too dependend on debt financing.
ERCB has a Debt to Equity ratio (0.35) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.95
WACC6.96%
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 75.00% of its industry peers.
A Quick Ratio of 0.94 indicates that ERCB may have some problems paying its short term obligations.
The Quick ratio of ERCB (0.94) is worse than 67.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 541.12% over the past year.
The earnings per share for ERCB have been decreasing by -17.01% on average. This is quite bad
The Revenue has decreased by -2.65% in the past year.
The Revenue has been growing slightly by 1.76% on average over the past years.
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 Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.35%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.85%
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
A Price/Earnings ratio of 10.69 indicates a reasonable valuation of ERCB.
Based on the Price/Earnings ratio, ERCB is valued cheaper than 96.43% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.41. ERCB is valued rather cheaply when compared to this.
ERCB is valuated correctly with a Price/Forward Earnings ratio of 13.67.
85.71% 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 35.40, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.69 | ||
| Fwd PE | 13.67 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCB is valued cheaper than 92.86% 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 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.9 | ||
| EV/EBITDA | 7.03 |
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 59.26% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y96.63%
EPS Next 3Y59.26%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.12%.
ERCB's Dividend Yield is rather good when compared to the industry average which is at 5.63. ERCB pays more dividend than 92.86% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, ERCB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
5.2 History
On average, the dividend of ERCB grows each year by 22.02%, which is quite nice.
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 2Y96.63%
EPS Next 3Y59.26%
FRA:ERCB (12/4/2025, 7:00:00 PM)
8.234
-0.08 (-0.96%)
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 Cap27.45B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target7.92 (-3.81%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.12% |
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)11.27%
PT rev (3m)10.76%
EPS NQ rev (1m)0%
EPS NQ rev (3m)14.08%
EPS NY rev (1m)20.53%
EPS NY rev (3m)19.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.69 | ||
| Fwd PE | 13.67 | ||
| P/S | 1.25 | ||
| P/FCF | 9.9 | ||
| P/OCF | 8.86 | ||
| P/B | 2.93 | ||
| P/tB | 6.71 | ||
| EV/EBITDA | 7.03 |
EPS(TTM)0.77
EY9.35%
EPS(NY)0.6
Fwd EY7.31%
FCF(TTM)0.83
FCFY10.1%
OCF(TTM)0.93
OCFY11.28%
SpS6.57
BVpS2.81
TBVpS1.23
PEG (NY)0.03
PEG (5Y)N/A
Graham Number6.98
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
WACC6.96%
ROIC/WACC1.95
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 Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.35%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.85%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
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 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 348.24% in the next year.