ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - FRA:ERCB - SE0000108656 - Common Stock
8.176 EUR
-0.1 (-1.21%)
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. A decent growth rate in combination with a cheap valuation! Better keep an eye on ERCB. ERCB also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERCB was profitable.
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 8.72% is fine compared to the rest of the industry. ERCB outperforms 79.31% of its industry peers.
The Return On Equity of ERCB (24.01%) is better than 82.76% of its industry peers.
ERCB's Return On Invested Capital of 16.85% is amongst the best of the industry. ERCB outperforms 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 12.11%.
The 3 year average ROIC (9.43%) for ERCB is below the current ROIC(16.85%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROIC | 16.85% |
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
Looking at the Profit Margin, with a value of 10.26%, ERCB is in the better half of the industry, outperforming 79.31% of the companies in the same industry.
ERCB's Profit Margin has declined in the last couple of years.
ERCB has a better Operating Margin (16.13%) than 79.31% 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 | 16.13% | ||
| 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.
Compared to 1 year ago, ERCB has about the same amount of shares outstanding.
ERCB has more shares outstanding than it did 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.
ERCB's Debt to FCF ratio of 1.45 is fine compared to the rest of the industry. ERCB outperforms 75.86% of its industry peers.
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/WACC2.7
WACC6.23%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERCB should not have too much problems paying its short term obligations.
ERCB's Current ratio of 1.17 is on the low side compared to the rest of the industry. ERCB is outperformed by 79.31% 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 68.97% 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 395.75% over the past year.
ERCB shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.01% yearly.
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)395.75%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%-5.34%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-10.28%
3.2 Future
ERCB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.10% yearly.
ERCB is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.77% yearly.
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
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
A Price/Earnings ratio of 13.63 indicates a correct valuation of ERCB.
Based on the Price/Earnings ratio, ERCB is valued cheaply inside the industry as 93.10% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.57. ERCB is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 14.57, which indicates a correct valuation of ERCB.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCB indicates a somewhat cheap valuation: ERCB is cheaper than 68.97% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.09, ERCB is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 14.57 |
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 86.21% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCB indicates a somewhat cheap valuation: ERCB is cheaper than 68.97% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.78 | ||
| EV/EBITDA | 5.82 |
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 a very decent profitability rating, which may justify a higher PE ratio.
ERCB's earnings are expected to grow with 55.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.05
PEG (5Y)N/A
EPS Next 2Y89.39%
EPS Next 3Y55.91%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.15%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.20, ERCB pays a better dividend. On top of this ERCB pays more dividend than 86.21% of the companies listed 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 | 3.15% |
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.
The dividend of ERCB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
FRA:ERCB (10/22/2025, 7:00:00 PM)
8.176
-0.1 (-1.21%)
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 Cap27.25B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target7.12 (-12.92%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
Yearly Dividend0.24
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years1
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.35%
Min EPS beat(2)-21.32%
Max EPS beat(2)20.62%
EPS beat(4)2
Avg EPS beat(4)9.6%
Min EPS beat(4)-21.32%
Max EPS beat(4)49.81%
EPS beat(8)5
Avg EPS beat(8)-42.25%
EPS beat(12)8
Avg EPS beat(12)-19.96%
EPS beat(16)9
Avg EPS beat(16)-14.95%
Revenue beat(2)0
Avg Revenue beat(2)-4.34%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-2.29%
Revenue beat(4)0
Avg Revenue beat(4)-2.81%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.49%
Revenue beat(12)3
Avg Revenue beat(12)-1.62%
Revenue beat(16)7
Avg Revenue beat(16)-0.77%
PT rev (1m)-0.95%
PT rev (3m)6.77%
EPS NQ rev (1m)-6.48%
EPS NQ rev (3m)-32.07%
EPS NY rev (1m)-1.05%
EPS NY rev (3m)1.18%
Revenue NQ rev (1m)-1.18%
Revenue NQ rev (3m)-11.66%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)-3.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 14.57 | ||
| P/S | 1.24 | ||
| P/FCF | 9.78 | ||
| P/OCF | 8.76 | ||
| P/B | 2.9 | ||
| P/tB | 6.63 | ||
| EV/EBITDA | 5.82 |
EPS(TTM)0.6
EY7.34%
EPS(NY)0.56
Fwd EY6.86%
FCF(TTM)0.84
FCFY10.22%
OCF(TTM)0.93
OCFY11.42%
SpS6.6
BVpS2.82
TBVpS1.23
PEG (NY)0.05
PEG (5Y)N/A
Graham Number6.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 23.94% | ||
| ROIC | 16.85% | ||
| ROICexc | 24.6% | ||
| ROICexgc | 51.38% | ||
| OM | 16.13% | ||
| 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 | 0.73 | ||
| Cap/Depr | 36.83% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 16.56 | ||
| Cash Conversion | 70.13% | ||
| Profit Quality | 123.37% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | N/A |
F-Score6
WACC6.23%
ROIC/WACC2.7
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)395.75%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%-5.34%
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%-10.28%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
EBIT growth 1Y92.37%
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%