ERICSSON LM-A SHS (ERCG.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCG - SE0000108649 - Common Stock
8.28 EUR
+0.09 (+1.1%)
Taking everything into account, ERCG scores 6 out of 10 in our fundamental rating. ERCG was compared to 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 may be a bit undervalued, certainly considering the very reasonable score on growth ERCG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- ERCG had positive earnings in the past year.
- 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
- The Return On Assets of ERCG (8.72%) is better than 84.38% of its industry peers.
- The Return On Equity of ERCG (24.01%) is better than 90.63% of its industry peers.
- ERCG's Return On Invested Capital of 13.55% is amongst the best of the industry. ERCG outperforms 84.38% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ERCG is below the industry average of 11.49%.
- The last Return On Invested Capital (13.55%) for ERCG is above the 3 year average (9.43%), which is a sign of increasing profitability.
| 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
- With an excellent Profit Margin value of 10.26%, ERCG belongs to the best 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.
- With a decent Operating Margin value of 12.97%, ERCG is doing good in 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 of 47.62%. This is comparable to the rest of the industry: ERCG outperforms 59.38% 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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERCG is still creating some value.
- ERCG has about the same amout of shares outstanding than it did 1 year ago.
- 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.
- ERCG has a better Debt to FCF ratio (1.45) than 78.13% of its industry peers.
- A Debt/Equity ratio of 0.35 indicates that ERCG is not too dependend on debt financing.
- 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/WACC1.78
WACC7.61%
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.
- ERCG has a worse Current ratio (1.17) than 75.00% of its industry peers.
- A Quick Ratio of 0.94 indicates that ERCG may have some problems paying its short term obligations.
- ERCG's Quick ratio of 0.94 is on the low side compared to the rest of the industry. ERCG is outperformed by 68.75% 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.
- 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 29.52% on average per year.
- 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
- 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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 10.48, the valuation of ERCG can be described as very reasonable.
- ERCG's Price/Earnings ratio is rather cheap when compared to the industry. ERCG is cheaper than 93.75% of the companies in the same industry.
- ERCG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.54.
- Based on the Price/Forward Earnings ratio of 13.34, the valuation of ERCG can be described as correct.
- Based on the Price/Forward Earnings ratio, ERCG is valued cheaper than 84.38% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.31, ERCG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.48 | ||
| Fwd PE | 13.34 |
4.2 Price Multiples
- 90.63% of the companies in the same industry are more expensive than ERCG, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCG indicates a somewhat cheap valuation: ERCG is cheaper than 78.13% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.71 | ||
| EV/EBITDA | 6.85 |
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.
- Compared to an average S&P500 Dividend Yield of 1.92, ERCG pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.27% |
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 (1/15/2026, 7:00:00 PM)
8.28
+0.09 (+1.1%)
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 Cap27.60B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.43
Price Target8.11 (-2.05%)
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 | 10.48 | ||
| Fwd PE | 13.34 | ||
| P/S | 1.23 | ||
| P/FCF | 9.71 | ||
| P/OCF | 8.69 | ||
| P/B | 2.88 | ||
| P/tB | 6.59 | ||
| EV/EBITDA | 6.85 |
EPS(TTM)0.79
EY9.54%
EPS(NY)0.62
Fwd EY7.5%
FCF(TTM)0.85
FCFY10.3%
OCF(TTM)0.95
OCFY11.5%
SpS6.74
BVpS2.88
TBVpS1.26
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
WACC7.61%
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 10.48 and the Price/Book (PB) ratio is 2.88.
How financially healthy is ERICSSON LM-A SHS?
The financial health rating of ERICSSON LM-A SHS (ERCG.DE) is 4 / 10.