ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - FRA:ERCB - SE0000108656 - Common Stock
8.094 EUR
-0.15 (-1.82%)
ERCB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 29 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 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.
In the past 5 years ERCB always reported a positive cash flow from operatings.
1.2 Ratios
ERCB has a better Return On Assets (8.72%) than 86.21% of its industry peers.
ERCB has a Return On Equity of 24.01%. This is amongst the best in the industry. ERCB outperforms 89.66% of its industry peers.
The Return On Invested Capital of ERCB (13.55%) is better than 86.21% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ERCB is below the industry average of 11.51%.
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's Profit Margin of 10.26% is amongst the best of the industry. ERCB outperforms 82.76% 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 79.31% of its industry peers.
In the last couple of years the Operating Margin of ERCB has grown nicely.
ERCB has a Gross Margin (47.62%) which is comparable to the rest of the 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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
The Debt to FCF ratio of ERCB is 1.45, which is an excellent value as it means it would take ERCB, only 1.45 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ERCB (1.45) is better than 82.76% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that ERCB is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.35, ERCB is in line with its industry, outperforming 55.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.19
WACC6.19%
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.
With a Current ratio value of 1.17, ERCB is not doing good in the industry: 72.41% of the companies in the same industry are doing better.
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.
ERCB has a worse Quick ratio (0.94) than 65.52% 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
ERCB shows a decrease in Revenue. In the last year, the revenue decreased by -2.65%.
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 30.26% on average over the next years. This is a very strong growth
Based on estimates for the next years, ERCB will show a decrease in Revenue. The Revenue will decrease by -0.91% on average per year.
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
With a Price/Earnings ratio of 10.51, the valuation of ERCB can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 96.55% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (25.47), we can say ERCB is valued rather cheaply.
The Price/Forward Earnings ratio is 13.47, which indicates a correct valuation of ERCB.
86.21% of the companies in the same industry are more expensive than ERCB, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.42, ERCB is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 13.47 |
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 89.66% of the companies listed in the same industry.
ERCB's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERCB is cheaper than 75.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.75 | ||
| EV/EBITDA | 6.89 |
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 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 3.04%. Purely for dividend investing, there may be better candidates out there.
ERCB's Dividend Yield is rather good when compared to the industry average which is at 5.25. ERCB pays more dividend than 93.10% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, ERCB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
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
37.84% of the earnings are spent on dividend by ERCB. This is a low number and sustainable payout ratio.
The dividend of ERCB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
FRA:ERCB (11/19/2025, 7:00:00 PM)
8.094
-0.15 (-1.82%)
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 Cap26.98B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target7.85 (-3.01%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
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)10.37%
PT rev (3m)9.77%
EPS NQ rev (1m)21.99%
EPS NQ rev (3m)14.08%
EPS NY rev (1m)20.53%
EPS NY rev (3m)21.96%
Revenue NQ rev (1m)0.72%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.51 | ||
| Fwd PE | 13.47 | ||
| P/S | 1.23 | ||
| P/FCF | 9.75 | ||
| P/OCF | 8.73 | ||
| P/B | 2.89 | ||
| P/tB | 6.61 | ||
| EV/EBITDA | 6.89 |
EPS(TTM)0.77
EY9.51%
EPS(NY)0.6
Fwd EY7.42%
FCF(TTM)0.83
FCFY10.25%
OCF(TTM)0.93
OCFY11.45%
SpS6.56
BVpS2.8
TBVpS1.22
PEG (NY)0.03
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
WACC6.19%
ROIC/WACC2.19
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 5Y30.26%
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-0.91%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y15.06%
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 8 / 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 7 / 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.