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 32 industry peers in the Communications Equipment industry. ERCG has an excellent profitability rating, 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. 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.
Of the past 5 years ERCG 4 years were profitable.
Each year in the past 5 years ERCG had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 8.72%, ERCG belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
ERCG's Return On Equity of 24.01% is amongst the best of the industry. ERCG outperforms 87.50% of its industry peers.
With an excellent Return On Invested Capital value of 13.55%, ERCG belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERCG is in line with the industry average of 10.60%.
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
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.
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
ERCG 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, ERCG has about the same amount of shares outstanding.
Compared to 5 years ago, ERCG has more shares outstanding
Compared to 1 year ago, ERCG has an improved debt to assets ratio.
2.2 Solvency
ERCG 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.
The Debt to FCF ratio of ERCG (1.45) is better than 81.25% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that ERCG is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.35, ERCG perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.82
WACC7.46%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERCG should not have too much problems paying its short term obligations.
ERCG has a worse Current ratio (1.17) than 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.
The earnings per share for ERCG have been decreasing by -17.01% on average. This is quite bad
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
Based on estimates for the next years, ERCG will show a very strong growth in Earnings Per Share. The EPS will grow by 30.35% on average per year.
Based on estimates for the next years, ERCG will show a decrease in Revenue. The Revenue will decrease by -0.85% on average per year.
EPS Next Y353.22%
EPS Next 2Y97.02%
EPS Next 3Y58.69%
EPS Next 5Y30.35%
Revenue Next Year-5.08%
Revenue Next 2Y-2.74%
Revenue Next 3Y-1.17%
Revenue Next 5Y-0.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
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.
When comparing the Price/Earnings ratio of ERCG to the average of the S&P500 Index (26.61), we can say ERCG is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 13.74, 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 is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.01, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 13.74 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCG is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
ERCG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERCG is cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.99 | ||
| EV/EBITDA | 7.06 |
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.
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 58.69% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y97.02%
EPS Next 3Y58.69%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.16%, ERCG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.69, 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 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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
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 2Y97.02%
EPS Next 3Y58.69%
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 Target7.99 (-4.77%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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)1.75%
PT rev (3m)9.84%
EPS NQ rev (1m)0%
EPS NQ rev (3m)14.08%
EPS NY rev (1m)1.11%
EPS NY rev (3m)20.59%
Revenue NQ rev (1m)-1.04%
Revenue NQ rev (3m)-1.51%
Revenue NY rev (1m)-0.2%
Revenue NY rev (3m)-1.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 13.74 | ||
| P/S | 1.26 | ||
| P/FCF | 9.99 | ||
| P/OCF | 8.94 | ||
| P/B | 2.96 | ||
| P/tB | 6.77 | ||
| EV/EBITDA | 7.06 |
EPS(TTM)0.78
EY9.3%
EPS(NY)0.61
Fwd EY7.28%
FCF(TTM)0.84
FCFY10.01%
OCF(TTM)0.94
OCFY11.19%
SpS6.64
BVpS2.84
TBVpS1.24
PEG (NY)0.03
PEG (5Y)N/A
Graham Number7.06
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
WACC7.46%
ROIC/WACC1.82
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 Y353.22%
EPS Next 2Y97.02%
EPS Next 3Y58.69%
EPS Next 5Y30.35%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-5.08%
Revenue Next 2Y-2.74%
Revenue Next 3Y-1.17%
Revenue Next 5Y-0.85%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year111.11%
EBIT Next 3Y21.86%
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 353.22% 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%.