ERICSSON LM-A SHS (ERCG.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCG - SE0000108649 - Common Stock
8.39 EUR
+0.01 (+0.12%)
Overall ERCG gets a fundamental rating of 6 out of 10. We evaluated ERCG against 31 industry peers in the Communications Equipment industry. ERCG has an excellent profitability rating, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on ERCG. Finally ERCG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERCG was profitable.
In the past year ERCG had a positive cash flow from operations.
Of the past 5 years ERCG 4 years were profitable.
In the past 5 years ERCG always reported a positive cash flow from operatings.
1.2 Ratios
ERCG has a better Return On Assets (8.72%) than 84.38% of its industry peers.
ERCG has a Return On Equity of 24.01%. This is amongst the best in the industry. ERCG outperforms 87.50% of its industry peers.
ERCG's Return On Invested Capital of 13.55% is amongst the best of the industry. ERCG outperforms 84.38% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ERCG is in line with the industry average of 9.92%.
The last Return On Invested Capital (13.55%) for ERCG 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
ERCG has a better Profit Margin (10.26%) than 84.38% of its industry peers.
In the last couple of years the Profit Margin of ERCG has declined.
ERCG has a Operating Margin of 12.97%. This is amongst the best in the industry. ERCG outperforms 81.25% of its industry peers.
In the last couple of years the Operating Margin of ERCG has grown nicely.
ERCG has a Gross Margin (47.62%) which is comparable to the rest of the industry.
ERCG'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), ERCG is creating value.
The number of shares outstanding for ERCG remains at a similar level compared to 1 year ago.
The number of shares outstanding for ERCG has been increased compared to 5 years ago.
Compared to 1 year ago, ERCG has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of ERCG is 1.45, which is an excellent value as it means it would take ERCG, only 1.45 years of fcf income to pay off all of its debts.
ERCG's Debt to FCF ratio of 1.45 is amongst the best of the industry. ERCG outperforms 81.25% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that ERCG is not too dependend on debt financing.
ERCG 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/WACC1.81
WACC7.47%
2.3 Liquidity
ERCG has a Current Ratio of 1.17. This is a normal value and indicates that ERCG is financially healthy and should not expect problems in meeting its short term obligations.
ERCG's Current ratio of 1.17 is on the low side compared to the rest of the industry. ERCG is outperformed by 78.13% of its industry peers.
ERCG has a Quick Ratio of 1.17. This is a bad value and indicates that ERCG is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.94, ERCG is not doing good in the industry: 71.88% of the companies in the same industry are doing better.
| 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.
ERCG 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, ERCG shows a decrease in Revenue. The Revenue has decreased by -2.65% in the last year.
ERCG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.76% yearly.
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
The Revenue is expected to decrease by -0.85% on average over the next years.
EPS Next Y352.29%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
EPS Next 5Y30.35%
Revenue Next Year-5.09%
Revenue Next 2Y-2.77%
Revenue Next 3Y-1.19%
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.
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
ERCG is valuated reasonably with a Price/Earnings ratio of 10.76.
Based on the Price/Earnings ratio, ERCG is valued cheaper than 93.75% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.92, ERCG is valued rather cheaply.
With a Price/Forward Earnings ratio of 13.65, ERCG is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCG indicates a rather cheap valuation: ERCG is cheaper than 84.38% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ERCG to the average of the S&P500 Index (23.46), we can say ERCG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 13.65 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCG is valued cheaper than 87.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERCG is valued a bit cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.94 | ||
| EV/EBITDA | 7.02 |
4.3 Compensation for Growth
ERCG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of ERCG may justify a higher PE ratio.
A more expensive valuation may be justified as ERCG's earnings are expected to grow with 58.79% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y97.18%
EPS Next 3Y58.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.18%, ERCG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.62, ERCG pays a better dividend. On top of this ERCG pays more dividend than 90.63% of the companies listed in the same industry.
ERCG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
5.2 History
The dividend of ERCG 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
ERCG pays out 37.84% of its income as dividend. This is a sustainable payout ratio.
ERCG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.84%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
FRA:ERCG (12/22/2025, 7:00:00 PM)
8.39
+0.01 (+0.12%)
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 Cap27.97B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target8.11 (-3.34%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
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)1.95%
PT rev (3m)11.53%
EPS NQ rev (1m)-2.91%
EPS NQ rev (3m)10.76%
EPS NY rev (1m)0.9%
EPS NY rev (3m)21.62%
Revenue NQ rev (1m)-1.17%
Revenue NQ rev (3m)-1.64%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-1.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 13.65 | ||
| P/S | 1.26 | ||
| P/FCF | 9.94 | ||
| P/OCF | 8.9 | ||
| P/B | 2.94 | ||
| P/tB | 6.74 | ||
| EV/EBITDA | 7.02 |
EPS(TTM)0.78
EY9.3%
EPS(NY)0.61
Fwd EY7.33%
FCF(TTM)0.84
FCFY10.06%
OCF(TTM)0.94
OCFY11.24%
SpS6.67
BVpS2.85
TBVpS1.24
PEG (NY)0.03
PEG (5Y)N/A
Graham Number7.07
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
WACC7.47%
ROIC/WACC1.81
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 Y352.29%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
EPS Next 5Y30.35%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-5.09%
Revenue Next 2Y-2.77%
Revenue Next 3Y-1.19%
Revenue Next 5Y-0.85%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year112.01%
EBIT Next 3Y21.84%
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-A SHS / ERCG.DE FAQ
What is the fundamental rating for ERCG stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERCG.DE.
Can you provide the valuation status for ERICSSON LM-A SHS?
ChartMill assigns a valuation rating of 8 / 10 to ERICSSON LM-A SHS (ERCG.DE). This can be considered as Undervalued.
What is the profitability of ERCG stock?
ERICSSON LM-A SHS (ERCG.DE) has a profitability rating of 8 / 10.
What is the expected EPS growth for ERICSSON LM-A SHS (ERCG.DE) stock?
The Earnings per Share (EPS) of ERICSSON LM-A SHS (ERCG.DE) is expected to grow by 352.29% in the next year.
Is the dividend of ERICSSON LM-A SHS sustainable?
The dividend rating of ERICSSON LM-A SHS (ERCG.DE) is 8 / 10 and the dividend payout ratio is 37.84%.