ERICSSON LM-A SHS (ERCG.DE) Fundamental Analysis & Valuation

FRA:ERCG • SE0000108649

Current stock price

10.44 EUR
+0.3 (+2.96%)
Last:

This ERCG.DE fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

7

1. ERCG.DE Profitability Analysis

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.
  • ERCG had a positive operating cash flow in each of the past 5 years.
ERCG.DE Yearly Net Income VS EBIT VS OCF VS FCFERCG.DE Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20B -20B 40B

1.2 Ratios

  • ERCG has a Return On Assets of 10.18%. This is amongst the best in the industry. ERCG outperforms 81.25% of its industry peers.
  • ERCG has a better Return On Equity (25.95%) than 84.38% of its industry peers.
  • The Return On Invested Capital of ERCG (8.85%) is better than 68.75% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for ERCG is below the industry average of 11.16%.
  • The last Return On Invested Capital (8.85%) for ERCG is above the 3 year average (6.69%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 10.18%
ROE 25.95%
ROIC 8.85%
ROA(3y)0.43%
ROA(5y)2.81%
ROE(3y)-0.28%
ROE(5y)6.78%
ROIC(3y)6.69%
ROIC(5y)6.97%
ERCG.DE Yearly ROA, ROE, ROICERCG.DE Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10 -10 20 -20 -30

1.3 Margins

  • ERCG has a Profit Margin of 12.01%. This is in the better half of the industry: ERCG outperforms 78.13% of its industry peers.
  • In the last couple of years the Profit Margin of ERCG has grown nicely.
  • With a decent Operating Margin value of 14.08%, ERCG is doing good in the industry, outperforming 75.00% of the companies in the same industry.
  • In the last couple of years the Operating Margin of ERCG has grown nicely.
  • Looking at the Gross Margin, with a value of 48.14%, ERCG is in line with its industry, outperforming 56.25% of the companies in the same industry.
  • ERCG's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 14.08%
PM (TTM) 12.01%
GM 48.14%
OM growth 3Y7.54%
OM growth 5Y1.88%
PM growth 3Y20.32%
PM growth 5Y9.81%
GM growth 3Y4.83%
GM growth 5Y3.45%
ERCG.DE Yearly Profit, Operating, Gross MarginsERCG.DE Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 40

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4

2. ERCG.DE Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ERCG is creating some value.
  • ERCG has about the same amout of shares outstanding than it did 1 year ago.
  • The number of shares outstanding for ERCG remains at a similar level compared to 5 years ago.
  • ERCG has a better debt/assets ratio than last year.
ERCG.DE Yearly Shares OutstandingERCG.DE Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B
ERCG.DE Yearly Total Debt VS Total AssetsERCG.DE Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100B 200B 300B

2.2 Solvency

  • The Debt to FCF ratio of ERCG is 1.38, which is an excellent value as it means it would take ERCG, only 1.38 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 1.38, 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 0.32. This is a healthy value indicating a solid balance between debt and equity.
  • ERCG has a Debt to Equity ratio (0.32) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.32
Debt/FCF 1.38
Altman-Z N/A
ROIC/WACC1.52
WACC5.84%
ERCG.DE Yearly LT Debt VS Equity VS FCFERCG.DE Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B 100B

2.3 Liquidity

  • ERCG has a Current Ratio of 1.29. 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 1.29, ERCG is not doing good in the industry: 65.63% of the companies in the same industry are doing better.
  • ERCG has a Quick Ratio of 1.08. 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 Quick ratio value of 1.08, ERCG is not doing good in the industry: 65.63% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 1.29
Quick Ratio 1.08
ERCG.DE Yearly Current Assets VS Current LiabilitesERCG.DE Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50B 100B 150B

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4

3. ERCG.DE Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 440.40% over the past year.
  • ERCG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.62% yearly.
  • Looking at the last year, ERCG shows a decrease in Revenue. The Revenue has decreased by -4.52% in the last year.
  • The Revenue has been growing slightly by 0.37% on average over the past years.
EPS 1Y (TTM)440.4%
EPS 3Y13.71%
EPS 5Y9.62%
EPS Q2Q%36.79%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y-4.48%
Revenue growth 5Y0.37%
Sales Q2Q%-4.98%

3.2 Future

  • The Earnings Per Share is expected to decrease by -8.08% on average over the next years.
  • Based on estimates for the next years, ERCG will show a small growth in Revenue. The Revenue will grow by 0.59% on average per year.
EPS Next Y-23.81%
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
EPS Next 5Y-8.08%
Revenue Next Year-1.63%
Revenue Next 2Y0.03%
Revenue Next 3Y0.89%
Revenue Next 5Y0.59%

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 decreasing.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
ERCG.DE Yearly Revenue VS EstimatesERCG.DE Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 50B 100B 150B 200B 250B
ERCG.DE Yearly EPS VS EstimatesERCG.DE Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 2 -2 4 6 8

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7

4. ERCG.DE Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 12.28, which indicates a correct valuation of ERCG.
  • Based on the Price/Earnings ratio, ERCG is valued cheaply inside the industry as 90.63% of the companies are valued more expensively.
  • The average S&P500 Price/Earnings ratio is at 26.86. ERCG is valued rather cheaply when compared to this.
  • The Price/Forward Earnings ratio is 16.09, which indicates a correct valuation of ERCG.
  • Based on the Price/Forward Earnings ratio, ERCG is valued cheaper than 84.38% of the companies in the same industry.
  • ERCG is valuated cheaply when we compare the Price/Forward Earnings ratio to 37.39, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 12.28
Fwd PE 16.09
ERCG.DE Price Earnings VS Forward Price EarningsERCG.DE Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

  • ERCG's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERCG is cheaper than 81.25% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, ERCG is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 13.07
EV/EBITDA 8.34
ERCG.DE Per share dataERCG.DE EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

4.3 Compensation for Growth

  • The decent profitability rating of ERCG may justify a higher PE ratio.
  • ERCG's earnings are expected to decrease with -4.80% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)1.28
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%

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6

5. ERCG.DE Dividend Analysis

5.1 Amount

  • ERCG has a Yearly Dividend Yield of 2.70%. Purely for dividend investing, there may be better candidates out there.
  • Compared to an average industry Dividend Yield of 2.35, ERCG pays a better dividend. On top of this ERCG pays more dividend than 90.63% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.82, ERCG pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.7%

5.2 History

  • The dividend of ERCG is nicely growing with an annual growth rate of 13.68%!
Dividend Growth(5Y)13.68%
Div Incr Years2
Div Non Decr Years7
ERCG.DE Yearly Dividends per shareERCG.DE Yearly Dividends per shareYearly Dividends per share 2019 2020 2021 2022 2023 2024 2025 2026 0.5 1 1.5 2 2.5

5.3 Sustainability

  • 33.41% of the earnings are spent on dividend by ERCG. This is a low number and sustainable payout ratio.
DP33.41%
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
ERCG.DE Yearly Income VS Free CF VS DividendERCG.DE Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20B -20B 40B
ERCG.DE Dividend Payout.ERCG.DE Dividend Payout, showing the Payout Ratio.ERCG.DE Dividend Payout.PayoutRetained Earnings

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ERCG.DE Fundamentals: All Metrics, Ratios and Statistics

ERICSSON LM-A SHS

FRA:ERCG (4/10/2026, 7:00:00 PM)

10.44

+0.3 (+2.96%)

Chartmill FA Rating
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)01-23
Earnings (Next)04-17
Inst Owners58.35%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap35.20B
Revenue(TTM)236.68B
Net Income(TTM)28.43B
Analysts56.55
Price Target8.85 (-15.23%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 2.7%
Yearly Dividend0.26
Dividend Growth(5Y)13.68%
DP33.41%
Div Incr Years2
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)53.68%
Min EPS beat(2)29.76%
Max EPS beat(2)77.6%
EPS beat(4)4
Avg EPS beat(4)44.45%
Min EPS beat(4)20.62%
Max EPS beat(4)77.6%
EPS beat(8)6
Avg EPS beat(8)-30.16%
EPS beat(12)10
Avg EPS beat(12)-8.61%
EPS beat(16)10
Avg EPS beat(16)-9.98%
Revenue beat(2)1
Avg Revenue beat(2)1.05%
Min Revenue beat(2)-0.88%
Max Revenue beat(2)2.98%
Revenue beat(4)1
Avg Revenue beat(4)-1.6%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)2.98%
Revenue beat(8)2
Avg Revenue beat(8)-1.04%
Revenue beat(12)3
Avg Revenue beat(12)-1.34%
Revenue beat(16)7
Avg Revenue beat(16)-0.7%
PT rev (1m)0.94%
PT rev (3m)9.08%
EPS NQ rev (1m)0.88%
EPS NQ rev (3m)5.69%
EPS NY rev (1m)0.81%
EPS NY rev (3m)5.9%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.16%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-1.25%
Valuation
Industry RankSector Rank
PE 12.28
Fwd PE 16.09
P/S 1.61
P/FCF 13.07
P/OCF 11.57
P/B 3.48
P/tB 7.17
EV/EBITDA 8.34
EPS(TTM)0.85
EY8.14%
EPS(NY)0.65
Fwd EY6.22%
FCF(TTM)0.8
FCFY7.65%
OCF(TTM)0.9
OCFY8.64%
SpS6.48
BVpS3
TBVpS1.46
PEG (NY)N/A
PEG (5Y)1.28
Graham Number7.57
Profitability
Industry RankSector Rank
ROA 10.18%
ROE 25.95%
ROCE 19.8%
ROIC 8.85%
ROICexc 13.34%
ROICexgc 26.95%
OM 14.08%
PM (TTM) 12.01%
GM 48.14%
FCFM 12.33%
ROA(3y)0.43%
ROA(5y)2.81%
ROE(3y)-0.28%
ROE(5y)6.78%
ROIC(3y)6.69%
ROIC(5y)6.97%
ROICexc(3y)9.88%
ROICexc(5y)10.27%
ROICexgc(3y)24.74%
ROICexgc(5y)25.68%
ROCE(3y)14.96%
ROCE(5y)15.6%
ROICexgc growth 3Y-6.32%
ROICexgc growth 5Y4.87%
ROICexc growth 3Y14.91%
ROICexc growth 5Y1.28%
OM growth 3Y7.54%
OM growth 5Y1.88%
PM growth 3Y20.32%
PM growth 5Y9.81%
GM growth 3Y4.83%
GM growth 5Y3.45%
F-Score7
Asset Turnover0.85
Health
Industry RankSector Rank
Debt/Equity 0.32
Debt/FCF 1.38
Debt/EBITDA 0.83
Cap/Depr 42.29%
Cap/Sales 1.59%
Interest Coverage 15.11
Cash Conversion 78.04%
Profit Quality 102.67%
Current Ratio 1.29
Quick Ratio 1.08
Altman-Z N/A
F-Score7
WACC5.84%
ROIC/WACC1.52
Cap/Depr(3y)41.44%
Cap/Depr(5y)47.37%
Cap/Sales(3y)1.71%
Cap/Sales(5y)1.88%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)440.4%
EPS 3Y13.71%
EPS 5Y9.62%
EPS Q2Q%36.79%
EPS Next Y-23.81%
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
EPS Next 5Y-8.08%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y-4.48%
Revenue growth 5Y0.37%
Sales Q2Q%-4.98%
Revenue Next Year-1.63%
Revenue Next 2Y0.03%
Revenue Next 3Y0.89%
Revenue Next 5Y0.59%
EBIT growth 1Y45.04%
EBIT growth 3Y2.72%
EBIT growth 5Y2.26%
EBIT Next Year7.58%
EBIT Next 3Y5.03%
EBIT Next 5Y2.67%
FCF growth 1Y-31.52%
FCF growth 3Y5.77%
FCF growth 5Y4.32%
OCF growth 1Y-28.77%
OCF growth 3Y2.21%
OCF growth 5Y2.64%

ERICSSON LM-A SHS / ERCG.DE Fundamental Analysis 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 6 / 10 to ERICSSON LM-A SHS (ERCG.DE). This can be considered as Fairly Valued.


How profitable is ERICSSON LM-A SHS (ERCG.DE) stock?

ERICSSON LM-A SHS (ERCG.DE) has a profitability rating of 8 / 10.


Can you provide the expected EPS growth for ERCG stock?

The Earnings per Share (EPS) of ERICSSON LM-A SHS (ERCG.DE) is expected to decline by -23.81% in the next year.


Can you provide the dividend sustainability for ERCG stock?

The dividend rating of ERICSSON LM-A SHS (ERCG.DE) is 6 / 10 and the dividend payout ratio is 33.41%.