ERICSSON LM-A SHS (ERCG.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCG - SE0000108649 - Common Stock
8.36 EUR
-0.03 (-0.36%)
ERCG gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals 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. ERCG may be a bit undervalued, certainly considering the very reasonable score on growth 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.
ERCG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERCG's Return On Assets of 8.72% is amongst the best of the industry. ERCG outperforms 87.10% of its industry peers.
ERCG has a Return On Equity of 24.01%. This is amongst the best in the industry. ERCG outperforms 93.55% of its industry peers.
ERCG has a Return On Invested Capital of 13.55%. This is amongst the best in the industry. ERCG outperforms 87.10% 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 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 Profit Margin of 10.26%. This is amongst the best in the industry. ERCG outperforms 87.10% of its industry peers.
In the last couple of years the Profit Margin of ERCG has declined.
The Operating Margin of ERCG (12.97%) is better than 83.87% of its industry peers.
In the last couple of years the Operating Margin of ERCG has grown nicely.
ERCG has a better Gross Margin (47.62%) than 64.52% of its industry peers.
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 just above the Cost of Capital (WACC), which means it 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 has been increased compared to 5 years ago.
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.
ERCG's Debt to FCF ratio of 1.45 is amongst the best of the industry. ERCG outperforms 83.87% of its industry peers.
ERCG has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
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/WACC1.77
WACC7.65%
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.
Looking at the Current ratio, with a value of 1.17, ERCG is doing worse than 77.42% of the companies in the same industry.
A Quick Ratio of 0.94 indicates that ERCG may have some problems paying its short term obligations.
The Quick ratio of ERCG (0.94) is worse than 70.97% of its industry peers.
| 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.
ERCG shows a decrease in Revenue. In the last year, the revenue decreased by -2.65%.
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 30.35% yearly.
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 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
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 10.72.
Based on the Price/Earnings ratio, ERCG is valued cheaper than 93.55% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.51, ERCG is valued rather cheaply.
A Price/Forward Earnings ratio of 13.62 indicates a correct valuation of ERCG.
83.87% of the companies in the same industry are more expensive than ERCG, based on the Price/Forward Earnings ratio.
ERCG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.72 | ||
| Fwd PE | 13.62 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCG is valued cheaper than 87.10% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERCG is valued a bit cheaper than 74.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.92 | ||
| EV/EBITDA | 7.01 |
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 58.79% 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
ERCG has a Yearly Dividend Yield of 3.18%. Purely for dividend investing, there may be better candidates out there.
ERCG's Dividend Yield is rather good when compared to the industry average which is at 2.62. ERCG pays more dividend than 90.32% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, ERCG pays a better dividend.
| 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 (12/29/2025, 7:00:00 PM)
8.36
-0.03 (-0.36%)
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 Cap27.87B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target8.11 (-2.99%)
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 | 10.72 | ||
| Fwd PE | 13.62 | ||
| P/S | 1.25 | ||
| P/FCF | 9.92 | ||
| P/OCF | 8.88 | ||
| P/B | 2.94 | ||
| P/tB | 6.73 | ||
| EV/EBITDA | 7.01 |
EPS(TTM)0.78
EY9.33%
EPS(NY)0.61
Fwd EY7.34%
FCF(TTM)0.84
FCFY10.08%
OCF(TTM)0.94
OCFY11.26%
SpS6.66
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
WACC7.65%
ROIC/WACC1.77
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
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 8 / 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 10.72 and the Price/Book (PB) ratio is 2.94.
How financially healthy is ERICSSON LM-A SHS?
The financial health rating of ERICSSON LM-A SHS (ERCG.DE) is 4 / 10.