ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - FRA:ERCB - SE0000108656 - Common Stock
8.118 EUR
-0.11 (-1.29%)
We assign a fundamental rating of 6 out of 10 to ERCB. ERCB was compared to 29 industry peers in the Communications Equipment industry. ERCB has an excellent profitability rating, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on ERCB. Finally ERCB also has an excellent dividend rating.
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.
Each year in the past 5 years ERCB had a positive operating cash flow.
1.2 Ratios
ERCB's Return On Assets of 8.72% is fine compared to the rest of the industry. ERCB outperforms 79.31% of its industry peers.
ERCB has a better Return On Equity (24.01%) than 82.76% of its industry peers.
Looking at the Return On Invested Capital, with a value of 16.85%, ERCB belongs to the top of the industry, outperforming 86.21% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERCB is below the industry average of 12.11%.
The last Return On Invested Capital (16.85%) for ERCB 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 | 16.85% |
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 10.26%, ERCB is doing good in the industry, outperforming 79.31% of the companies in the same industry.
ERCB's Profit Margin has declined in the last couple of years.
The Operating Margin of ERCB (16.13%) is better than 79.31% of its industry peers.
In the last couple of years the Operating Margin of ERCB has grown nicely.
Looking at the Gross Margin, with a value of 47.62%, ERCB is in line with its industry, outperforming 51.72% 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 | 16.13% | ||
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 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.
Compared to 1 year ago, ERCB has an improved debt to assets ratio.
2.2 Solvency
ERCB 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.
Looking at the Debt to FCF ratio, with a value of 1.45, ERCB is in the better half of the industry, outperforming 75.86% of the companies in the same industry.
ERCB has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
ERCB 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/WACC2.7
WACC6.23%
2.3 Liquidity
ERCB has a Current Ratio of 1.17. This is a normal value and indicates that ERCB 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, ERCB is doing worse than 79.31% of the companies in the same industry.
ERCB has a Quick Ratio of 1.17. This is a bad value and indicates that ERCB is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.94, ERCB is doing worse than 68.97% of the companies in the same industry.
| 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 395.75% over the past year.
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.
The Revenue has decreased by -2.65% in the past year.
The Revenue has been growing slightly by 1.76% on average over the past years.
EPS 1Y (TTM)395.75%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%-5.34%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-10.28%
3.2 Future
ERCB is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.10% yearly.
ERCB is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.77% yearly.
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
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 13.76, the valuation of ERCB can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of ERCB indicates a rather cheap valuation: ERCB is cheaper than 93.10% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ERCB to the average of the S&P500 Index (27.42), we can say ERCB is valued slightly cheaper.
ERCB is valuated correctly with a Price/Forward Earnings ratio of 14.62.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERCB indicates a somewhat cheap valuation: ERCB is cheaper than 68.97% of the companies listed in the same industry.
ERCB is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.76 | ||
| Fwd PE | 14.62 |
4.2 Price Multiples
86.21% of the companies in the same industry are more expensive than ERCB, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERCB indicates a somewhat cheap valuation: ERCB is cheaper than 68.97% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.82 | ||
| EV/EBITDA | 5.84 |
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 decent profitability rating of ERCB may justify a higher PE ratio.
ERCB's earnings are expected to grow with 55.91% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.05
PEG (5Y)N/A
EPS Next 2Y89.39%
EPS Next 3Y55.91%
5. Dividend
5.1 Amount
ERCB has a Yearly Dividend Yield of 3.15%.
ERCB's Dividend Yield is rather good when compared to the industry average which is at 5.20. ERCB pays more dividend than 86.21% of the companies in the same industry.
ERCB's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
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 Years1
Div Non Decr Years6
5.3 Sustainability
37.84% of the earnings are spent on dividend by ERCB. This is a low number and sustainable payout ratio.
ERCB's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.84%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
FRA:ERCB (10/17/2025, 7:00:00 PM)
8.118
-0.11 (-1.29%)
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 Cap27.06B
Analysts56.43
Price Target7.12 (-12.29%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.15% |
Yearly Dividend0.24
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years1
Div Non Decr Years6
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.35%
Min EPS beat(2)-21.32%
Max EPS beat(2)20.62%
EPS beat(4)2
Avg EPS beat(4)9.6%
Min EPS beat(4)-21.32%
Max EPS beat(4)49.81%
EPS beat(8)5
Avg EPS beat(8)-42.25%
EPS beat(12)8
Avg EPS beat(12)-19.96%
EPS beat(16)9
Avg EPS beat(16)-14.95%
Revenue beat(2)0
Avg Revenue beat(2)-4.34%
Min Revenue beat(2)-6.39%
Max Revenue beat(2)-2.29%
Revenue beat(4)0
Avg Revenue beat(4)-2.81%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)-0.45%
Revenue beat(8)1
Avg Revenue beat(8)-2.49%
Revenue beat(12)3
Avg Revenue beat(12)-1.62%
Revenue beat(16)7
Avg Revenue beat(16)-0.77%
PT rev (1m)-0.95%
PT rev (3m)6.77%
EPS NQ rev (1m)-6.48%
EPS NQ rev (3m)-32.07%
EPS NY rev (1m)-1.05%
EPS NY rev (3m)1.18%
Revenue NQ rev (1m)-1.18%
Revenue NQ rev (3m)-11.66%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)-3.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.76 | ||
| Fwd PE | 14.62 | ||
| P/S | 1.24 | ||
| P/FCF | 9.82 | ||
| P/OCF | 8.79 | ||
| P/B | 2.91 | ||
| P/tB | 6.66 | ||
| EV/EBITDA | 5.84 |
EPS(TTM)0.59
EY7.27%
EPS(NY)0.56
Fwd EY6.84%
FCF(TTM)0.83
FCFY10.19%
OCF(TTM)0.92
OCFY11.38%
SpS6.54
BVpS2.79
TBVpS1.22
PEG (NY)0.05
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 23.94% | ||
| ROIC | 16.85% | ||
| ROICexc | 24.6% | ||
| ROICexgc | 51.38% | ||
| OM | 16.13% | ||
| 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%
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-Score6
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 0.73 | ||
| Cap/Depr | 36.83% | ||
| Cap/Sales | 1.48% | ||
| Interest Coverage | 16.56 | ||
| Cash Conversion | 70.13% | ||
| Profit Quality | 123.37% | ||
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | N/A |
F-Score6
WACC6.23%
ROIC/WACC2.7
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)395.75%
EPS 3Y-38.27%
EPS 5Y-17.01%
EPS Q2Q%-5.34%
EPS Next Y271.88%
EPS Next 2Y89.39%
EPS Next 3Y55.91%
EPS Next 5Y29.1%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-10.28%
Revenue Next Year-3.55%
Revenue Next 2Y-1.45%
Revenue Next 3Y-0.62%
Revenue Next 5Y-0.77%
EBIT growth 1Y92.37%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y13.49%
FCF growth 1Y392.6%
FCF growth 3Y7.36%
FCF growth 5Y33.08%
OCF growth 1Y169.74%
OCF growth 3Y5.8%
OCF growth 5Y22.35%