ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
FRA:ERCB - Deutsche Boerse Ag - SE0000108656 - Common Stock - Currency: EUR
Overall ERCB gets a fundamental rating of 5 out of 10. We evaluated ERCB against 25 industry peers in the Communications Equipment industry. ERCB scores excellent on profitability, but there are some minor concerns on its financial health. ERCB has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year ERCB was profitable.
In the past year ERCB had a positive cash flow from operations.
Of the past 5 years ERCB 4 years were profitable.
ERCB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERCB has a better Return On Assets (0.58%) than 68.00% of its industry peers.
With a decent Return On Equity value of 1.87%, ERCB is doing good in the industry, outperforming 68.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.87%, ERCB belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERCB is in line with the industry average of 9.33%.
The 3 year average ROIC (9.43%) for ERCB is below the current ROIC(12.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.58% | ||
| ROE | 1.87% | ||
| ROIC | 12.87% |
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 a decent Profit Margin value of 0.65%, ERCB is doing good in the industry, outperforming 68.00% of the companies in the same industry.
ERCB's Profit Margin has declined in the last couple of years.
The Operating Margin of ERCB (10.72%) is better than 84.00% of its industry peers.
ERCB's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 46.21%, ERCB is in line with its industry, outperforming 56.00% of the companies in the same industry.
In the last couple of years the Gross Margin of ERCB has grown nicely.
| 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ERCB is creating value.
Compared to 1 year ago, ERCB has about the same amount of shares outstanding.
ERCB has more shares outstanding than it did 5 years ago.
ERCB has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of ERCB is 1.02, which is an excellent value as it means it would take ERCB, 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, ERCB belongs to the top of the industry, outperforming 88.00% of the companies in the same industry.
A Debt/Equity ratio of 0.41 indicates that ERCB is not too dependend on debt financing.
ERCB has a Debt to Equity ratio of 0.41. This is comparable to the rest of the industry: ERCB outperforms 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.41 | ||
| Debt/FCF | 1.02 | ||
| Altman-Z | N/A |
ROIC/WACC1.94
WACC6.63%
2.3 Liquidity
A Current Ratio of 1.09 indicates that ERCB should not have too much problems paying its short term obligations.
ERCB has a worse Current ratio (1.09) than 76.00% of its industry peers.
ERCB has a Quick Ratio of 1.09. This is a bad value and indicates that ERCB is not financially healthy enough and could expect problems in meeting its short term obligations.
ERCB has a Quick ratio of 0.88. This is in the lower half of the industry: ERCB underperforms 64.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
ERCB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -46.92%.
Measured over the past years, ERCB shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -17.01% on average per year.
Looking at the last year, ERCB shows a decrease in Revenue. The Revenue has decreased by -1.79% in the last year.
The Revenue has been growing slightly by 1.76% on average over the past years.
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
ERCB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 45.47% yearly.
The Revenue is expected to decrease by -0.82% on average over the next years.
EPS Next Y267.53%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
EPS Next 5Y45.47%
Revenue Next Year0.35%
Revenue Next 2Y0.68%
Revenue Next 3Y1.13%
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
Based on the Price/Earnings ratio of 38.03, the valuation of ERCB can be described as expensive.
72.00% of the companies in the same industry are more expensive than ERCB, based on the Price/Earnings ratio.
ERCB is valuated rather expensively when we compare the Price/Earnings ratio to 26.17, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 12.99, which indicates a correct valuation of ERCB.
ERCB's Price/Forward Earnings ratio is rather cheap when compared to the industry. ERCB is cheaper than 84.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, ERCB is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.03 | ||
| Fwd PE | 12.99 |
4.2 Price Multiples
ERCB's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERCB is cheaper than 84.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 88.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.62 | ||
| EV/EBITDA | 7.14 |
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.
ERCB has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ERCB's earnings are expected to grow with 58.42% in the coming years.
PEG (NY)0.14
PEG (5Y)N/A
EPS Next 2Y93.12%
EPS Next 3Y58.42%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.32%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.11, ERCB pays a better dividend. On top of this ERCB pays more dividend than 88.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, ERCB pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
5.2 History
On average, the dividend of ERCB grows each year by 22.02%, which is quite nice.
Dividend Growth(5Y)22.02%
Div Incr Years4
Div Non Decr Years5
5.3 Sustainability
573.48% of the earnings are spent on dividend by ERCB. This is not a sustainable payout ratio.
The dividend of ERCB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP573.48%
EPS Next 2Y93.12%
EPS Next 3Y58.42%
FRA:ERCB (5/28/2025, 7:00:00 PM)
7.606
-0.09 (-1.12%)
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 Cap25.35B
Analysts57.24
Price Target7.59 (-0.21%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
Yearly Dividend0.25
Dividend Growth(5Y)22.02%
DP573.48%
Div Incr Years4
Div Non Decr Years5
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)-3.88%
PT rev (3m)-2.76%
EPS NQ rev (1m)11.73%
EPS NQ rev (3m)30.94%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.67%
Revenue NQ rev (1m)-0.37%
Revenue NQ rev (3m)-2.95%
Revenue NY rev (1m)-0.43%
Revenue NY rev (3m)-3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.03 | ||
| Fwd PE | 12.99 | ||
| P/S | 1.1 | ||
| P/FCF | 6.62 | ||
| P/OCF | 6.06 | ||
| P/B | 3.21 | ||
| P/tB | 11.91 | ||
| EV/EBITDA | 7.14 |
EPS(TTM)0.2
EY2.63%
EPS(NY)0.59
Fwd EY7.7%
FCF(TTM)1.15
FCFY15.12%
OCF(TTM)1.26
OCFY16.51%
SpS6.88
BVpS2.37
TBVpS0.64
PEG (NY)0.14
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.58% | ||
| ROE | 1.87% | ||
| ROCE | 18.28% | ||
| ROIC | 12.87% | ||
| ROICexc | 19.49% | ||
| ROICexgc | 55.79% | ||
| 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)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%
ROICexcg growth 3Y9.12%
ROICexcg 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-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
WACC6.63%
ROIC/WACC1.94
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 Year0.35%
Revenue Next 2Y0.68%
Revenue Next 3Y1.13%
Revenue Next 5Y-0.82%
EBIT growth 1Y48.21%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year84.47%
EBIT Next 3Y23.21%
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%