ERICSSON LM-A SHS (ERCG.DE) Stock Fundamental Analysis
FRA:ERCG - Deutsche Boerse Ag - SE0000108649 - Common Stock - Currency: EUR
Overall ERCG gets a fundamental rating of 4 out of 10. We evaluated ERCG against 25 industry peers in the Communications Equipment industry. Both the profitability and the financial health of ERCG get a neutral evaluation. Nothing too spectacular is happening here. ERCG has a decent growth rate and is not valued too expensively.
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.
ERCG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERCG has a Return On Assets of -0.50%. This is comparable to the rest of the industry: ERCG outperforms 60.00% of its industry peers.
ERCG has a Return On Equity of -1.58%. This is comparable to the rest of the industry: ERCG outperforms 60.00% of its industry peers.
The Return On Invested Capital of ERCG (9.24%) is better than 84.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.5% | ||
| ROE | -1.58% | ||
| ROIC | 9.24% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
In the last couple of years the Profit Margin of ERCG has declined.
ERCG has a Operating Margin of 8.16%. This is in the better half of the industry: ERCG outperforms 72.00% of its industry peers.
In the last couple of years the Operating Margin of ERCG has declined.
ERCG has a worse Gross Margin (43.44%) than 60.00% of its industry peers.
In the last couple of years the Gross Margin of ERCG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.16% | ||
| PM (TTM) | N/A | ||
| GM | 43.44% |
OM growth 3Y-36.4%
OM growth 5Y-5.54%
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.
There is no outstanding debt for ERCG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
ERCG has a debt to FCF ratio of 1.11. This is a very positive value and a sign of high solvency as it would only need 1.11 years to pay back of all of its debts.
ERCG has a better Debt to FCF ratio (1.11) than 84.00% of its industry peers.
ERCG has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
ERCG has a Debt to Equity ratio of 0.44. This is comparable to the rest of the industry: ERCG outperforms 44.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.11 | ||
| Altman-Z | N/A |
ROIC/WACC1.35
WACC6.84%
2.3 Liquidity
ERCG has a Current Ratio of 1.19. This is a normal value and indicates that ERCG is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.19, ERCG is doing worse than 84.00% of the companies in the same industry.
ERCG has a Quick Ratio of 1.19. This is a bad value and indicates that ERCG is not financially healthy enough and could expect problems in meeting its short term obligations.
ERCG has a worse Quick ratio (0.95) than 72.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.95 |
3. Growth
3.1 Past
ERCG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -60.46%.
ERCG 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 -5.87% in the past year.
The Revenue has been growing slightly by 1.76% on average over the past years.
EPS 1Y (TTM)-60.46%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%22.54%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%1.44%
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 45.47% on average per year.
The Revenue is expected to grow by 4.46% on average over the next years.
EPS Next Y292.93%
EPS Next 2Y100.23%
EPS Next 3Y66.47%
EPS Next 5Y45.47%
Revenue Next Year3.62%
Revenue Next 2Y3.08%
Revenue Next 3Y1.98%
Revenue Next 5Y4.46%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 49.40 indicates a quite expensive valuation of ERCG.
64.00% of the companies in the same industry are more expensive than ERCG, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.47, ERCG is valued quite expensively.
ERCG is valuated correctly with a Price/Forward Earnings ratio of 12.61.
Based on the Price/Forward Earnings ratio, ERCG is valued cheaper than 88.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 92.74, ERCG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.4 | ||
| Fwd PE | 12.61 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCG is valued a bit cheaper than 64.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCG indicates a rather cheap valuation: ERCG is cheaper than 84.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.17 | ||
| EV/EBITDA | 8.63 |
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.
A more expensive valuation may be justified as ERCG's earnings are expected to grow with 66.47% in the coming years.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y100.23%
EPS Next 3Y66.47%
5. Dividend
5.1 Amount
ERCG has a Yearly Dividend Yield of 3.16%.
ERCG's Dividend Yield is rather good when compared to the industry average which is at 3.61. ERCG pays more dividend than 88.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, ERCG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
5.2 History
On average, the dividend of ERCG grows each year by 21.64%, which is quite nice.
Dividend Growth(5Y)21.64%
Div Incr Years4
Div Non Decr Years5
5.3 Sustainability
The earnings of ERCG are negative and hence is the payout ratio. ERCG will probably not be able to sustain this dividend level.
The dividend of ERCG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-667.4%
EPS Next 2Y100.23%
EPS Next 3Y66.47%
ERICSSON LM-A SHS
FRA:ERCG (1/29/2025, 7:00:00 PM)
7.41
-0.85 (-10.29%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners40.83%
Inst Owner ChangeN/A
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap24.69B
Analysts55.17
Price Target7.15 (-3.51%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
Yearly Dividend2.7
Dividend Growth(5Y)21.64%
DP-667.4%
Div Incr Years4
Div Non Decr Years5
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-284.38%
Min EPS beat(2)-588.91%
Max EPS beat(2)20.16%
EPS beat(4)3
Avg EPS beat(4)-94.09%
Min EPS beat(4)-588.91%
Max EPS beat(4)160.39%
EPS beat(8)6
Avg EPS beat(8)-34.73%
EPS beat(12)7
Avg EPS beat(12)-23.13%
EPS beat(16)9
Avg EPS beat(16)-15.73%
Revenue beat(2)1
Avg Revenue beat(2)0.49%
Min Revenue beat(2)-0.69%
Max Revenue beat(2)1.67%
Revenue beat(4)1
Avg Revenue beat(4)-2.16%
Min Revenue beat(4)-7.15%
Max Revenue beat(4)1.67%
Revenue beat(8)3
Avg Revenue beat(8)-1.03%
Revenue beat(12)7
Avg Revenue beat(12)-0.09%
Revenue beat(16)8
Avg Revenue beat(16)-1.07%
PT rev (1m)0%
PT rev (3m)17.17%
EPS NQ rev (1m)-1.85%
EPS NQ rev (3m)-1.85%
EPS NY rev (1m)4.29%
EPS NY rev (3m)4.29%
Revenue NQ rev (1m)0.32%
Revenue NQ rev (3m)0.32%
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.4 | ||
| Fwd PE | 12.61 | ||
| P/S | 1.14 | ||
| P/FCF | 7.17 | ||
| P/OCF | 6.52 | ||
| P/B | 3.25 | ||
| P/tB | 12.79 | ||
| EV/EBITDA | 8.63 |
EPS(TTM)0.15
EY2.02%
EPS(NY)0.59
Fwd EY7.93%
FCF(TTM)1.03
FCFY13.94%
OCF(TTM)1.14
OCFY15.33%
SpS6.49
BVpS2.28
TBVpS0.58
PEG (NY)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.5% | ||
| ROE | -1.58% | ||
| ROCE | 13.12% | ||
| ROIC | 9.24% | ||
| ROICexc | 13.36% | ||
| ROICexgc | 34.12% | ||
| OM | 8.16% | ||
| PM (TTM) | N/A | ||
| GM | 43.44% | ||
| FCFM | 15.92% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-36.4%
OM growth 5Y-5.54%
PM growth 3Y-90.62%
PM growth 5Y-61.69%
GM growth 3Y1.11%
GM growth 5Y3.7%
F-Score4
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 1.11 | ||
| Debt/EBITDA | 1.23 | ||
| Cap/Depr | 36.02% | ||
| Cap/Sales | 1.59% | ||
| Interest Coverage | 6.62 | ||
| Cash Conversion | 139.28% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.95 | ||
| Altman-Z | N/A |
F-Score4
WACC6.84%
ROIC/WACC1.35
Cap/Depr(3y)39.65%
Cap/Depr(5y)46.92%
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)-60.46%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%22.54%
EPS Next Y292.93%
EPS Next 2Y100.23%
EPS Next 3Y66.47%
EPS Next 5Y45.47%
Revenue 1Y (TTM)-5.87%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%1.44%
Revenue Next Year3.62%
Revenue Next 2Y3.08%
Revenue Next 3Y1.98%
Revenue Next 5Y4.46%
EBIT growth 1Y-13.58%
EBIT growth 3Y-35.01%
EBIT growth 5Y-3.88%
EBIT Next Year72.82%
EBIT Next 3Y28.77%
EBIT Next 5Y15.89%
FCF growth 1Y536.89%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y243.37%
OCF growth 3Y5.8%
OCF growth 5Y22.35%