ERICSSON LM-B SHS (1ERICB.MI) Stock Fundamental Analysis
BIT:1ERICB - Euronext Milan - SE0000108656 - Common Stock - Currency: EUR
We assign a fundamental rating of 5 out of 10 to 1ERICB. 1ERICB was compared to 25 industry peers in the Communications Equipment industry. 1ERICB has only an average score on both its financial health and profitability. 1ERICB has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year 1ERICB was profitable.
In the past year 1ERICB had a positive cash flow from operations.
1ERICB had positive earnings in 4 of the past 5 years.
Each year in the past 5 years 1ERICB had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.58%, 1ERICB is in line with its industry, outperforming 60.00% of the companies in the same industry.
1ERICB has a Return On Equity (1.87%) which is comparable to the rest of the industry.
With an excellent Return On Invested Capital value of 13.71%, 1ERICB belongs to the best of the industry, outperforming 96.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for 1ERICB is in line with the industry average of 9.33%.
The last Return On Invested Capital (13.71%) for 1ERICB is above the 3 year average (10.05%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.58% | ||
| ROE | 1.87% | ||
| ROIC | 13.71% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.05%
ROIC(5y)11.58%
1.3 Margins
With a Profit Margin value of 0.65%, 1ERICB perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
1ERICB's Profit Margin has declined in the last couple of years.
1ERICB has a better Operating Margin (10.72%) than 76.00% of its industry peers.
In the last couple of years the Operating Margin of 1ERICB has grown nicely.
The Gross Margin of 1ERICB (46.21%) is comparable to the rest of the industry.
1ERICB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.72% | ||
| PM (TTM) | 0.65% | ||
| GM | 46.21% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 1ERICB is creating value.
Compared to 1 year ago, 1ERICB has about the same amount of shares outstanding.
The number of shares outstanding for 1ERICB has been increased compared to 5 years ago.
The debt/assets ratio for 1ERICB has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of 1ERICB is 1.02, which is an excellent value as it means it would take 1ERICB, only 1.02 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.02, 1ERICB belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
1ERICB has a Debt/Equity ratio of 0.41. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.41, 1ERICB is doing good in the industry, outperforming 64.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.05
WACC6.69%
2.3 Liquidity
A Current Ratio of 1.09 indicates that 1ERICB should not have too much problems paying its short term obligations.
1ERICB has a Current ratio of 1.09. This is in the lower half of the industry: 1ERICB underperforms 72.00% of its industry peers.
1ERICB has a Quick Ratio of 1.09. This is a bad value and indicates that 1ERICB is not financially healthy enough and could expect problems in meeting its short term obligations.
1ERICB has a Quick ratio of 0.88. This is in the lower half of the industry: 1ERICB underperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
1ERICB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -46.92%.
The earnings per share for 1ERICB have been decreasing by -17.01% on average. This is quite bad
The Revenue has decreased by -1.79% in the past year.
Measured over the past years, 1ERICB shows a small growth in Revenue. The Revenue has been growing by 1.76% on average per year.
EPS 1Y (TTM)-46.92%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%60.24%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%3.19%
3.2 Future
1ERICB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 45.47% yearly.
1ERICB is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.82% yearly.
EPS Next Y267.53%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
EPS Next 5Y45.47%
Revenue Next Year0.78%
Revenue Next 2Y1.01%
Revenue Next 3Y1.39%
Revenue Next 5Y-0.82%
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
The Price/Earnings ratio is 39.55, which means the current valuation is very expensive for 1ERICB.
Based on the Price/Earnings ratio, 1ERICB is valued a bit cheaper than the industry average as 64.00% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of 1ERICB to the average of the S&P500 Index (26.19), we can say 1ERICB is valued expensively.
Based on the Price/Forward Earnings ratio of 13.50, the valuation of 1ERICB can be described as correct.
76.00% of the companies in the same industry are more expensive than 1ERICB, based on the Price/Forward Earnings ratio.
1ERICB is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.55 | ||
| Fwd PE | 13.5 |
4.2 Price Multiples
76.00% of the companies in the same industry are more expensive than 1ERICB, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, 1ERICB is valued a bit cheaper than 80.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.87 | ||
| EV/EBITDA | 7.35 |
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.
1ERICB has a very decent profitability rating, which may justify a higher PE ratio.
1ERICB's earnings are expected to grow with 58.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.15
PEG (5Y)N/A
EPS Next 2Y93.12%
EPS Next 3Y58.42%
5. Dividend
5.1 Amount
1ERICB has a Yearly Dividend Yield of 3.60%. Purely for dividend investing, there may be better candidates out there.
1ERICB's Dividend Yield is rather good when compared to the industry average which is at 5.11. 1ERICB pays more dividend than 92.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, 1ERICB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.6% |
5.2 History
On average, the dividend of 1ERICB grows each year by 22.02%, which is quite nice.
Dividend Growth(5Y)22.02%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
1ERICB pays out 573.48% of its income as dividend. This is not a sustainable payout ratio.
The dividend of 1ERICB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP573.48%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
BIT:1ERICB (5/21/2025, 7:00:00 PM)
7.91
+0.75 (+10.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners52.48%
Inst Owner ChangeN/A
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap26.36B
Analysts54.48
Price Target7.72 (-2.4%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.6% |
Yearly Dividend0.25
Dividend Growth(5Y)22.02%
DP573.48%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)19.55%
Min EPS beat(2)-10.72%
Max EPS beat(2)49.81%
EPS beat(4)2
Avg EPS beat(4)-132.41%
Min EPS beat(4)-588.91%
Max EPS beat(4)49.81%
EPS beat(8)6
Avg EPS beat(8)-35.54%
EPS beat(12)7
Avg EPS beat(12)-21.49%
EPS beat(16)9
Avg EPS beat(16)-14.64%
Revenue beat(2)0
Avg Revenue beat(2)-1.28%
Min Revenue beat(2)-2.1%
Max Revenue beat(2)-0.45%
Revenue beat(4)1
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-2.1%
Max Revenue beat(4)1.67%
Revenue beat(8)1
Avg Revenue beat(8)-1.78%
Revenue beat(12)5
Avg Revenue beat(12)-0.75%
Revenue beat(16)7
Avg Revenue beat(16)-0.79%
PT rev (1m)-1.33%
PT rev (3m)7.27%
EPS NQ rev (1m)17.19%
EPS NQ rev (3m)3.82%
EPS NY rev (1m)-4.67%
EPS NY rev (3m)-2.45%
Revenue NQ rev (1m)-2.59%
Revenue NQ rev (3m)-3.69%
Revenue NY rev (1m)-2.59%
Revenue NY rev (3m)-2.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.55 | ||
| Fwd PE | 13.5 | ||
| P/S | 1.15 | ||
| P/FCF | 6.87 | ||
| P/OCF | 6.29 | ||
| P/B | 3.33 | ||
| P/tB | 12.37 | ||
| EV/EBITDA | 7.35 |
EPS(TTM)0.2
EY2.53%
EPS(NY)0.59
Fwd EY7.41%
FCF(TTM)1.15
FCFY14.55%
OCF(TTM)1.26
OCFY15.89%
SpS6.89
BVpS2.38
TBVpS0.64
PEG (NY)0.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.58% | ||
| ROE | 1.87% | ||
| ROCE | 18.28% | ||
| ROIC | 13.71% | ||
| ROICexc | 20.76% | ||
| ROICexgc | 59.44% | ||
| OM | 10.72% | ||
| PM (TTM) | 0.65% | ||
| GM | 46.21% | ||
| FCFM | 16.7% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.05%
ROIC(5y)11.58%
ROICexc(3y)14.08%
ROICexc(5y)16.96%
ROICexgc(3y)44.7%
ROICexgc(5y)41.2%
ROCE(3y)13.4%
ROCE(5y)15.43%
ROICexcg growth 3Y9.12%
ROICexcg growth 5Y32.67%
ROICexc growth 3Y-8.84%
ROICexc growth 5Y16.91%
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-Score7
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.02 | ||
| Debt/EBITDA | 0.94 | ||
| Cap/Depr | 36.59% | ||
| Cap/Sales | 1.55% | ||
| Interest Coverage | 10.63 | ||
| Cash Conversion | 122.12% | ||
| Profit Quality | 2589.32% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.88 | ||
| Altman-Z | N/A |
F-Score7
WACC6.69%
ROIC/WACC2.05
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)-46.92%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%60.24%
EPS Next Y267.53%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
EPS Next 5Y45.47%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%3.19%
Revenue Next Year0.78%
Revenue Next 2Y1.01%
Revenue Next 3Y1.39%
Revenue Next 5Y-0.82%
EBIT growth 1Y48.21%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year70.53%
EBIT Next 3Y22.61%
EBIT Next 5Y17.34%
FCF growth 1Y126.71%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y82.12%
OCF growth 3Y5.8%
OCF growth 5Y22.35%