ERICSSON LM-A SHS (ERCG.DE) Fundamental Analysis & Valuation
FRA:ERCG • SE0000108649
Current stock price
10.44 EUR
+0.3 (+2.96%)
Last:
This ERCG.DE fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. ERCG.DE Profitability Analysis
1.1 Basic Checks
- ERCG had positive earnings in the past year.
- ERCG had a positive operating cash flow in the past year.
- ERCG had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years ERCG had a positive operating cash flow.
1.2 Ratios
- ERCG has a better Return On Assets (10.18%) than 83.87% of its industry peers.
- ERCG has a better Return On Equity (25.95%) than 87.10% of its industry peers.
- The Return On Invested Capital of ERCG (8.85%) is better than 70.97% of its industry peers.
- ERCG had an Average Return On Invested Capital over the past 3 years of 6.69%. This is below the industry average of 10.67%.
- The last Return On Invested Capital (8.85%) for ERCG is above the 3 year average (6.69%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.18% | ||
| ROE | 25.95% | ||
| ROIC | 8.85% |
ROA(3y)0.43%
ROA(5y)2.81%
ROE(3y)-0.28%
ROE(5y)6.78%
ROIC(3y)6.69%
ROIC(5y)6.97%
1.3 Margins
- Looking at the Profit Margin, with a value of 12.01%, ERCG belongs to the top of the industry, outperforming 80.65% of the companies in the same industry.
- In the last couple of years the Profit Margin of ERCG has grown nicely.
- ERCG's Operating Margin of 14.08% is fine compared to the rest of the industry. ERCG outperforms 77.42% of its industry peers.
- In the last couple of years the Operating Margin of ERCG has grown nicely.
- ERCG has a Gross Margin (48.14%) which is in line with its industry peers.
- In the last couple of years the Gross Margin of ERCG has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.08% | ||
| PM (TTM) | 12.01% | ||
| GM | 48.14% |
OM growth 3Y7.54%
OM growth 5Y1.88%
PM growth 3Y20.32%
PM growth 5Y9.81%
GM growth 3Y4.83%
GM growth 5Y3.45%
2. ERCG.DE Health Analysis
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERCG is still creating some value.
- The number of shares outstanding for ERCG remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, ERCG has about the same amount of shares outstanding.
- 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 1.38, which is an excellent value as it means it would take ERCG, only 1.38 years of fcf income to pay off all of its debts.
- ERCG has a better Debt to FCF ratio (1.38) than 77.42% of its industry peers.
- ERCG has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.32, ERCG is in line with its industry, outperforming 45.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.38 | ||
| Altman-Z | N/A |
ROIC/WACC1.6
WACC5.54%
2.3 Liquidity
- A Current Ratio of 1.29 indicates that ERCG should not have too much problems paying its short term obligations.
- ERCG has a Current ratio of 1.29. This is in the lower half of the industry: ERCG underperforms 64.52% of its industry peers.
- ERCG has a Quick Ratio of 1.08. This is a normal value and indicates that ERCG is financially healthy and should not expect problems in meeting its short term obligations.
- With a Quick ratio value of 1.08, ERCG is not doing good in the industry: 64.52% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.08 |
3. ERCG.DE Growth Analysis
3.1 Past
- The Earnings Per Share has grown by an impressive 440.40% over the past year.
- ERCG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.62% yearly.
- The Revenue has decreased by -4.52% in the past year.
- ERCG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.37% yearly.
EPS 1Y (TTM)440.4%
EPS 3Y13.71%
EPS 5Y9.62%
EPS Q2Q%36.79%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y-4.48%
Revenue growth 5Y0.37%
Sales Q2Q%-4.98%
3.2 Future
- Based on estimates for the next years, ERCG will show a decrease in Earnings Per Share. The EPS will decrease by -8.08% on average per year.
- The Revenue is expected to grow by 0.59% on average over the next years.
EPS Next Y-23.81%
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
EPS Next 5Y-8.08%
Revenue Next Year-1.63%
Revenue Next 2Y0.03%
Revenue Next 3Y0.89%
Revenue Next 5Y0.59%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. ERCG.DE Valuation Analysis
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 12.28, the valuation of ERCG can be described as correct.
- 90.32% of the companies in the same industry are more expensive than ERCG, based on the Price/Earnings ratio.
- ERCG is valuated cheaply when we compare the Price/Earnings ratio to 26.78, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 16.09, the valuation of ERCG can be described as correct.
- Based on the Price/Forward Earnings ratio, ERCG is valued cheaply inside the industry as 83.87% 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 23.54.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.28 | ||
| Fwd PE | 16.09 |
4.2 Price Multiples
- ERCG's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERCG is cheaper than 80.65% of the companies in the same industry.
- ERCG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ERCG is cheaper than 77.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.07 | ||
| EV/EBITDA | 8.34 |
4.3 Compensation for Growth
- The excellent profitability rating of ERCG may justify a higher PE ratio.
- A cheap valuation may be justified as ERCG's earnings are expected to decrease with -4.80% in the coming years.
PEG (NY)N/A
PEG (5Y)1.28
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
5. ERCG.DE Dividend Analysis
5.1 Amount
- ERCG has a Yearly Dividend Yield of 2.70%.
- ERCG's Dividend Yield is rather good when compared to the industry average which is at 2.44. ERCG pays more dividend than 90.32% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, ERCG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
5.2 History
- On average, the dividend of ERCG grows each year by 13.68%, which is quite nice.
Dividend Growth(5Y)13.68%
Div Incr Years2
Div Non Decr Years7
5.3 Sustainability
- ERCG pays out 33.41% of its income as dividend. This is a sustainable payout ratio.
DP33.41%
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
ERCG.DE Fundamentals: All Metrics, Ratios and Statistics
FRA:ERCG (4/10/2026, 7:00:00 PM)
10.44
+0.3 (+2.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)01-23 2026-01-23/bmo
Earnings (Next)04-17 2026-04-17/bmo
Inst Owners58.35%
Inst Owner ChangeN/A
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap35.20B
Revenue(TTM)236.68B
Net Income(TTM)28.43B
Analysts56.55
Price Target8.85 (-15.23%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.7% |
Yearly Dividend0.26
Dividend Growth(5Y)13.68%
DP33.41%
Div Incr Years2
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)53.68%
Min EPS beat(2)29.76%
Max EPS beat(2)77.6%
EPS beat(4)4
Avg EPS beat(4)44.45%
Min EPS beat(4)20.62%
Max EPS beat(4)77.6%
EPS beat(8)6
Avg EPS beat(8)-30.16%
EPS beat(12)10
Avg EPS beat(12)-8.61%
EPS beat(16)10
Avg EPS beat(16)-9.98%
Revenue beat(2)1
Avg Revenue beat(2)1.05%
Min Revenue beat(2)-0.88%
Max Revenue beat(2)2.98%
Revenue beat(4)1
Avg Revenue beat(4)-1.6%
Min Revenue beat(4)-6.39%
Max Revenue beat(4)2.98%
Revenue beat(8)2
Avg Revenue beat(8)-1.04%
Revenue beat(12)3
Avg Revenue beat(12)-1.34%
Revenue beat(16)7
Avg Revenue beat(16)-0.7%
PT rev (1m)0.94%
PT rev (3m)9.08%
EPS NQ rev (1m)0.88%
EPS NQ rev (3m)5.69%
EPS NY rev (1m)0.81%
EPS NY rev (3m)5.9%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.16%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-1.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.28 | ||
| Fwd PE | 16.09 | ||
| P/S | 1.61 | ||
| P/FCF | 13.07 | ||
| P/OCF | 11.57 | ||
| P/B | 3.48 | ||
| P/tB | 7.17 | ||
| EV/EBITDA | 8.34 |
EPS(TTM)0.85
EY8.14%
EPS(NY)0.65
Fwd EY6.22%
FCF(TTM)0.8
FCFY7.65%
OCF(TTM)0.9
OCFY8.64%
SpS6.48
BVpS3
TBVpS1.46
PEG (NY)N/A
PEG (5Y)1.28
Graham Number7.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.18% | ||
| ROE | 25.95% | ||
| ROCE | 19.8% | ||
| ROIC | 8.85% | ||
| ROICexc | 13.34% | ||
| ROICexgc | 26.95% | ||
| OM | 14.08% | ||
| PM (TTM) | 12.01% | ||
| GM | 48.14% | ||
| FCFM | 12.33% |
ROA(3y)0.43%
ROA(5y)2.81%
ROE(3y)-0.28%
ROE(5y)6.78%
ROIC(3y)6.69%
ROIC(5y)6.97%
ROICexc(3y)9.88%
ROICexc(5y)10.27%
ROICexgc(3y)24.74%
ROICexgc(5y)25.68%
ROCE(3y)14.96%
ROCE(5y)15.6%
ROICexgc growth 3Y-6.32%
ROICexgc growth 5Y4.87%
ROICexc growth 3Y14.91%
ROICexc growth 5Y1.28%
OM growth 3Y7.54%
OM growth 5Y1.88%
PM growth 3Y20.32%
PM growth 5Y9.81%
GM growth 3Y4.83%
GM growth 5Y3.45%
F-Score7
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 1.38 | ||
| Debt/EBITDA | 0.83 | ||
| Cap/Depr | 42.29% | ||
| Cap/Sales | 1.59% | ||
| Interest Coverage | 15.11 | ||
| Cash Conversion | 78.04% | ||
| Profit Quality | 102.67% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | N/A |
F-Score7
WACC5.54%
ROIC/WACC1.6
Cap/Depr(3y)41.44%
Cap/Depr(5y)47.37%
Cap/Sales(3y)1.71%
Cap/Sales(5y)1.88%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)440.4%
EPS 3Y13.71%
EPS 5Y9.62%
EPS Q2Q%36.79%
EPS Next Y-23.81%
EPS Next 2Y-9.78%
EPS Next 3Y-4.8%
EPS Next 5Y-8.08%
Revenue 1Y (TTM)-4.52%
Revenue growth 3Y-4.48%
Revenue growth 5Y0.37%
Sales Q2Q%-4.98%
Revenue Next Year-1.63%
Revenue Next 2Y0.03%
Revenue Next 3Y0.89%
Revenue Next 5Y0.59%
EBIT growth 1Y45.04%
EBIT growth 3Y2.72%
EBIT growth 5Y2.26%
EBIT Next Year7.58%
EBIT Next 3Y5.03%
EBIT Next 5Y2.67%
FCF growth 1Y-31.52%
FCF growth 3Y5.77%
FCF growth 5Y4.32%
OCF growth 1Y-28.77%
OCF growth 3Y2.21%
OCF growth 5Y2.64%
ERICSSON LM-A SHS / ERCG.DE Fundamental Analysis FAQ
Can you provide the ChartMill fundamental rating for ERICSSON LM-A SHS?
ChartMill assigns a fundamental rating of 6 / 10 to ERCG.DE.
What is the valuation status of ERICSSON LM-A SHS (ERCG.DE) stock?
ChartMill assigns a valuation rating of 7 / 10 to ERICSSON LM-A SHS (ERCG.DE). This can be considered as Undervalued.
How profitable is ERICSSON LM-A SHS (ERCG.DE) stock?
ERICSSON LM-A SHS (ERCG.DE) has a profitability rating of 8 / 10.
Can you provide the expected EPS growth for ERCG stock?
The Earnings per Share (EPS) of ERICSSON LM-A SHS (ERCG.DE) is expected to decline by -23.81% in the next year.
Can you provide the dividend sustainability for ERCG stock?
The dividend rating of ERICSSON LM-A SHS (ERCG.DE) is 6 / 10 and the dividend payout ratio is 33.41%.