ERICSSON LM-B SHS (ERCB.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCB - SE0000108656 - Common Stock
8.352 EUR
+0.06 (+0.75%)
We assign a fundamental rating of 6 out of 10 to ERCB. ERCB was compared to 31 industry peers in the Communications Equipment industry. ERCB scores excellent on profitability, but there are some minor concerns on its financial health. ERCB scores decently on growth, while it is valued quite cheap. This could make an interesting combination. ERCB also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERCB was profitable.
ERCB had a positive operating cash flow in the past year.
Of the past 5 years ERCB 4 years were profitable.
In the past 5 years ERCB always reported a positive cash flow from operatings.
1.2 Ratios
ERCB's Return On Assets of 8.72% is amongst the best of the industry. ERCB outperforms 90.32% of its industry peers.
With an excellent Return On Equity value of 24.01%, ERCB belongs to the best of the industry, outperforming 96.77% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.55%, ERCB belongs to the best of the industry, outperforming 90.32% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ERCB is in line with the industry average of 9.92%.
The last Return On Invested Capital (13.55%) 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 | 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
The Profit Margin of ERCB (10.26%) is better than 90.32% of its industry peers.
In the last couple of years the Profit Margin of ERCB has declined.
The Operating Margin of ERCB (12.97%) is better than 87.10% of its industry peers.
In the last couple of years the Operating Margin of ERCB has grown nicely.
With a decent Gross Margin value of 47.62%, ERCB is doing good in the industry, outperforming 67.74% 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 | 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ERCB is creating some value.
The number of shares outstanding for ERCB remains at a similar level compared to 1 year ago.
ERCB has more shares outstanding than it did 5 years ago.
ERCB has a better debt/assets ratio than last year.
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.
The Debt to FCF ratio of ERCB (1.45) is better than 87.10% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that ERCB is not too dependend on debt financing.
ERCB has a Debt to Equity ratio of 0.35. This is comparable to the rest of the industry: ERCB outperforms 54.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.77
WACC7.65%
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.
ERCB's Current ratio of 1.17 is on the low side compared to the rest of the industry. ERCB is outperformed by 74.19% of its industry peers.
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.
ERCB's Quick ratio of 0.94 is on the low side compared to the rest of the industry. ERCB is outperformed by 67.74% 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.
The earnings per share for ERCB have been decreasing by -17.01% on average. This is quite bad
ERCB 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
Based on estimates for the next years, ERCB will show a very strong growth in Earnings Per Share. The EPS will grow by 30.35% on average per year.
The Revenue is expected to decrease by -0.85% on average over the next years.
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
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.71 indicates a reasonable valuation of ERCB.
96.77% of the companies in the same industry are more expensive than ERCB, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.51. ERCB is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 13.61, the valuation of ERCB can be described as correct.
Based on the Price/Forward Earnings ratio, ERCB is valued cheaper than 87.10% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.13. ERCB is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.71 | ||
| Fwd PE | 13.61 |
4.2 Price Multiples
ERCB's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERCB is cheaper than 90.32% of the companies in the same industry.
ERCB's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERCB is cheaper than 77.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.91 | ||
| EV/EBITDA | 7 |
4.3 Compensation for Growth
ERCB's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of ERCB may justify a higher PE ratio.
A more expensive valuation may be justified as ERCB'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
ERCB has a Yearly Dividend Yield of 3.18%. Purely for dividend investing, there may be better candidates out there.
ERCB's Dividend Yield is rather good when compared to the industry average which is at 2.62. ERCB pays more dividend than 93.55% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, ERCB pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
5.2 History
The dividend of ERCB 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
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 2Y97.18%
EPS Next 3Y58.79%
FRA:ERCB (12/30/2025, 7:00:00 PM)
8.352
+0.06 (+0.75%)
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 Cap27.84B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target8.05 (-3.62%)
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)1.65%
PT rev (3m)12.03%
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 | 10.71 | ||
| Fwd PE | 13.61 | ||
| P/S | 1.25 | ||
| P/FCF | 9.91 | ||
| P/OCF | 8.87 | ||
| P/B | 2.93 | ||
| P/tB | 6.72 | ||
| EV/EBITDA | 7 |
EPS(TTM)0.78
EY9.34%
EPS(NY)0.61
Fwd EY7.35%
FCF(TTM)0.84
FCFY10.09%
OCF(TTM)0.94
OCFY11.27%
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-B SHS / ERCB.DE FAQ
Can you provide the ChartMill fundamental rating for ERICSSON LM-B SHS?
ChartMill assigns a fundamental rating of 6 / 10 to ERCB.DE.
What is the valuation status for ERCB stock?
ChartMill assigns a valuation rating of 8 / 10 to ERICSSON LM-B SHS (ERCB.DE). This can be considered as Undervalued.
What is the profitability of ERCB stock?
ERICSSON LM-B SHS (ERCB.DE) has a profitability rating of 8 / 10.
What is the valuation of ERICSSON LM-B SHS based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ERICSSON LM-B SHS (ERCB.DE) is 10.71 and the Price/Book (PB) ratio is 2.93.
What is the financial health of ERICSSON LM-B SHS (ERCB.DE) stock?
The financial health rating of ERICSSON LM-B SHS (ERCB.DE) is 4 / 10.