ERICSSON LM-A SHS (ERCG.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCG - SE0000108649 - Common Stock
8.19 EUR
-0.17 (-2.03%)
Overall ERCG gets a fundamental rating of 6 out of 10. We evaluated ERCG against 32 industry peers in the Communications Equipment industry. ERCG scores excellent on profitability, but there are some minor concerns on its financial health. ERCG scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally ERCG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year ERCG was profitable.
- ERCG had a positive operating cash flow in the past year.
- ERCG had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years ERCG had a positive operating cash flow.
1.2 Ratios
- ERCG has a Return On Assets of 8.72%. This is amongst the best in the industry. ERCG outperforms 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 90.63% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 13.55%, ERCG belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for ERCG is below the industry average of 11.49%.
- The 3 year average ROIC (9.43%) for ERCG 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
- Looking at the Profit Margin, with a value of 10.26%, ERCG belongs to the top of the industry, outperforming 81.25% of the companies in the same industry.
- In the last couple of years the Profit Margin of ERCG has declined.
- Looking at the Operating Margin, with a value of 12.97%, ERCG is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
- ERCG's Operating Margin has improved in the last couple of years.
- 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) just above the Cost of Capital (WACC), ERCG is creating some value.
- Compared to 1 year ago, ERCG has about the same amount of shares outstanding.
- 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.
- Looking at the Debt to FCF ratio, with a value of 1.45, ERCG is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
- ERCG has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
- ERCG's Debt to Equity ratio of 0.35 is in line compared to the rest of the industry. ERCG outperforms 53.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.78
WACC7.62%
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.
- With a Current ratio value of 1.17, ERCG is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
- 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: 68.75% 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.
- 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
- ERCG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.52% yearly.
- The Revenue is expected to decrease by -1.48% on average over the next years.
EPS Next Y352.29%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
EPS Next 5Y29.52%
Revenue Next Year-5.09%
Revenue Next 2Y-2.77%
Revenue Next 3Y-1.19%
Revenue Next 5Y-1.47%
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
- The Price/Earnings ratio is 10.37, which indicates a very decent valuation of ERCG.
- Based on the Price/Earnings ratio, ERCG is valued cheaply inside the industry as 93.75% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.33. ERCG is valued rather cheaply when compared to this.
- Based on the Price/Forward Earnings ratio of 13.22, the valuation of ERCG can be described as correct.
- Based on the Price/Forward Earnings ratio, ERCG is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
- ERCG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.37 | ||
| Fwd PE | 13.22 |
4.2 Price Multiples
- ERCG's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERCG is cheaper than 90.63% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, ERCG is valued a bit cheaper than 78.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.63 | ||
| EV/EBITDA | 6.79 |
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.
- ERCG has a very decent profitability rating, which may justify a higher PE ratio.
- ERCG's earnings are expected to grow with 58.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y97.18%
EPS Next 3Y58.79%
5. Dividend
5.1 Amount
- ERCG has a Yearly Dividend Yield of 3.27%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.52, 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 1.91.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
5.2 History
- On average, the dividend of ERCG 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
- 37.84% of the earnings are spent on dividend by ERCG. This is a low number and sustainable payout ratio.
- The dividend of ERCG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
FRA:ERCG (1/13/2026, 7:00:00 PM)
8.19
-0.17 (-2.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)10-14 2025-10-14/bmo
Earnings (Next)01-23 2026-01-23/amc
Inst Owners56.85%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap27.30B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target8.11 (-0.98%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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)1.54%
PT rev (3m)11.53%
EPS NQ rev (1m)-2.91%
EPS NQ rev (3m)10.76%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)21.62%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-1.34%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.37 | ||
| Fwd PE | 13.22 | ||
| P/S | 1.22 | ||
| P/FCF | 9.63 | ||
| P/OCF | 8.62 | ||
| P/B | 2.85 | ||
| P/tB | 6.53 | ||
| EV/EBITDA | 6.79 |
EPS(TTM)0.79
EY9.65%
EPS(NY)0.62
Fwd EY7.56%
FCF(TTM)0.85
FCFY10.39%
OCF(TTM)0.95
OCFY11.6%
SpS6.72
BVpS2.87
TBVpS1.25
PEG (NY)0.03
PEG (5Y)N/A
Graham Number7.15
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
WACC7.62%
ROIC/WACC1.78
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 5Y29.52%
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-1.47%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year112.01%
EBIT Next 3Y21.84%
EBIT Next 5Y14.41%
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
Can you provide the ChartMill fundamental rating for ERICSSON LM-A SHS?
ChartMill assigns a fundamental rating of 6 / 10 to ERCG.DE.
What is the valuation status of ERICSSON LM-A SHS (ERCG.DE) stock?
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 7 / 10.
What are the PE and PB ratios of ERICSSON LM-A SHS (ERCG.DE) stock?
The Price/Earnings (PE) ratio for ERICSSON LM-A SHS (ERCG.DE) is 10.37 and the Price/Book (PB) ratio is 2.85.
How financially healthy is ERICSSON LM-A SHS?
The financial health rating of ERICSSON LM-A SHS (ERCG.DE) is 4 / 10.