ERICSSON LM-A SHS (ERCG.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:ERCG - SE0000108649 - Common Stock
8.39 EUR
+0.01 (+0.12%)
Taking everything into account, ERCG scores 6 out of 10 in our fundamental rating. ERCG was compared to 31 industry peers in the Communications Equipment industry. ERCG scores excellent on profitability, 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 ERCG. ERCG also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERCG was profitable.
ERCG had a positive operating cash flow in the past year.
Of the past 5 years ERCG 4 years were profitable.
Each year in the past 5 years ERCG had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.72%, ERCG belongs to the top of the industry, outperforming 84.38% of the companies in the same industry.
ERCG has a Return On Equity of 24.01%. This is amongst the best in the industry. ERCG outperforms 87.50% of its industry peers.
ERCG has a better Return On Invested Capital (13.55%) than 84.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ERCG is in line with the industry average of 9.92%.
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 84.38% of the companies in the same industry.
In the last couple of years the Profit Margin of ERCG has declined.
ERCG has a better Operating Margin (12.97%) than 81.25% of its industry peers.
In the last couple of years the Operating Margin of ERCG has grown nicely.
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.
In the last couple of years the Gross Margin of ERCG 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) well above the Cost of Capital (WACC), ERCG is creating value.
Compared to 1 year ago, ERCG has about the same amount of shares outstanding.
The number of shares outstanding for ERCG has been increased compared to 5 years ago.
The debt/assets ratio for ERCG has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of ERCG is 1.45, which is an excellent value as it means it would take ERCG, only 1.45 years of fcf income to pay off all of its debts.
ERCG has a better Debt to FCF ratio (1.45) than 81.25% 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 of 0.35. This is comparable to the rest of the industry: ERCG outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC1.81
WACC7.47%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERCG should not have too much problems paying its short term obligations.
ERCG has a Current ratio of 1.17. This is in the lower half of the industry: ERCG underperforms 78.13% of its industry peers.
A Quick Ratio of 0.94 indicates that ERCG may have some problems paying its short term obligations.
ERCG has a Quick ratio of 0.94. This is in the lower half of the industry: ERCG underperforms 71.88% 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 ERCG have been decreasing by -17.01% on average. This is quite bad
Looking at the last year, ERCG shows a decrease in Revenue. The Revenue has decreased by -2.65% in the last year.
Measured over the past years, ERCG shows a small growth in Revenue. The Revenue has been growing by 1.76% on average per year.
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 30.35% on average per year.
Based on estimates for the next years, ERCG will show a decrease in Revenue. The Revenue will decrease by -0.85% on average per year.
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
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
A Price/Earnings ratio of 10.76 indicates a reasonable valuation of ERCG.
Compared to the rest of the industry, the Price/Earnings ratio of ERCG indicates a rather cheap valuation: ERCG is cheaper than 93.75% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.92. ERCG is valued rather cheaply when compared to this.
ERCG is valuated correctly with a Price/Forward Earnings ratio of 13.65.
Based on the Price/Forward Earnings ratio, ERCG is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
ERCG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.46.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.76 | ||
| Fwd PE | 13.65 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ERCG is valued cheaper than 87.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERCG is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.94 | ||
| EV/EBITDA | 7.02 |
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 excellent profitability rating of ERCG may justify a higher PE ratio.
A more expensive valuation may be justified as ERCG'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
With a Yearly Dividend Yield of 3.18%, ERCG has a reasonable but not impressive dividend return.
ERCG's Dividend Yield is rather good when compared to the industry average which is at 2.62. ERCG pays more dividend than 90.63% of the companies in the same industry.
ERCG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.18% |
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.
The dividend of ERCG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y97.18%
EPS Next 3Y58.79%
FRA:ERCG (12/22/2025, 7:00:00 PM)
8.39
+0.01 (+0.12%)
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 Cap27.97B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target8.11 (-3.34%)
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)1.95%
PT rev (3m)11.53%
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 | 10.76 | ||
| Fwd PE | 13.65 | ||
| P/S | 1.26 | ||
| P/FCF | 9.94 | ||
| P/OCF | 8.9 | ||
| P/B | 2.94 | ||
| P/tB | 6.74 | ||
| EV/EBITDA | 7.02 |
EPS(TTM)0.78
EY9.3%
EPS(NY)0.61
Fwd EY7.33%
FCF(TTM)0.84
FCFY10.06%
OCF(TTM)0.94
OCFY11.24%
SpS6.67
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
WACC7.47%
ROIC/WACC1.81
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-A SHS / ERCG.DE FAQ
What is the fundamental rating for ERCG stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERCG.DE.
Can you provide the valuation status for ERICSSON LM-A SHS?
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 8 / 10.
What is the expected EPS growth for ERICSSON LM-A SHS (ERCG.DE) stock?
The Earnings per Share (EPS) of ERICSSON LM-A SHS (ERCG.DE) is expected to grow by 352.29% in the next year.
Is the dividend of ERICSSON LM-A SHS sustainable?
The dividend rating of ERICSSON LM-A SHS (ERCG.DE) is 8 / 10 and the dividend payout ratio is 37.84%.