ERICSSON (LM) TEL-SP ADR (ERIC) Stock Fundamental Analysis
USA - NASDAQ:ERIC - US2948216088 - ADR
9.72 USD
-0.13 (-1.32%)
9.72 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to ERIC. ERIC was compared to 48 industry peers in the Communications Equipment industry. ERIC has an excellent profitability rating, but there are some minor concerns on its financial health. ERIC is valued quite cheap, while showing a decent growth score. This is a good combination! ERIC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ERIC was profitable.
In the past year ERIC had a positive cash flow from operations.
ERIC had positive earnings in 4 of the past 5 years.
In the past 5 years ERIC always reported a positive cash flow from operatings.
1.2 Ratios
ERIC has a Return On Assets of 8.72%. This is amongst the best in the industry. ERIC outperforms 85.42% of its industry peers.
With an excellent Return On Equity value of 24.01%, ERIC belongs to the best of the industry, outperforming 89.58% of the companies in the same industry.
ERIC has a better Return On Invested Capital (15.20%) than 89.58% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ERIC is below the industry average of 12.74%.
The 3 year average ROIC (10.59%) for ERIC is below the current ROIC(15.20%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROIC | 15.2% |
ROA(3y)-1.18%
ROA(5y)2.06%
ROE(3y)-4.3%
ROE(5y)5.63%
ROIC(3y)10.59%
ROIC(5y)12.19%
1.3 Margins
Looking at the Profit Margin, with a value of 10.26%, ERIC belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
ERIC's Profit Margin has declined in the last couple of years.
ERIC's Operating Margin of 12.97% is amongst the best of the industry. ERIC outperforms 81.25% of its industry peers.
In the last couple of years the Operating Margin of ERIC has grown nicely.
ERIC has a Gross Margin of 47.62%. This is in the better half of the industry: ERIC outperforms 62.50% of its industry peers.
In the last couple of years the Gross Margin of ERIC 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), ERIC is creating value.
Compared to 1 year ago, ERIC has about the same amount of shares outstanding.
The number of shares outstanding for ERIC has been increased compared to 5 years ago.
ERIC has a better debt/assets ratio than last year.
2.2 Solvency
ERIC 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, ERIC is in the better half of the industry, outperforming 72.92% of the companies in the same industry.
A Debt/Equity ratio of 0.35 indicates that ERIC is not too dependend on debt financing.
The Debt to Equity ratio of ERIC (0.35) is worse than 66.67% of its industry peers.
Although ERIC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | N/A |
ROIC/WACC2.29
WACC6.64%
2.3 Liquidity
A Current Ratio of 1.17 indicates that ERIC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.17, ERIC is doing worse than 81.25% of the companies in the same industry.
A Quick Ratio of 0.94 indicates that ERIC may have some problems paying its short term obligations.
ERIC has a Quick ratio of 0.94. This is in the lower half of the industry: ERIC underperforms 75.00% 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 ERIC have been decreasing by -17.01% on average. This is quite bad
Looking at the last year, ERIC shows a decrease in Revenue. The Revenue has decreased by -2.65% in the last year.
Measured over the past years, ERIC 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
The Earnings Per Share is expected to grow by 30.26% on average over the next years. This is a very strong growth
ERIC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.91% yearly.
EPS Next Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
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
The Price/Earnings ratio is 10.80, which indicates a very decent valuation of ERIC.
93.75% of the companies in the same industry are more expensive than ERIC, based on the Price/Earnings ratio.
ERIC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.89.
With a Price/Forward Earnings ratio of 13.84, ERIC is valued correctly.
83.33% of the companies in the same industry are more expensive than ERIC, based on the Price/Forward Earnings ratio.
ERIC is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.59, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.8 | ||
| Fwd PE | 13.84 |
4.2 Price Multiples
91.67% of the companies in the same industry are more expensive than ERIC, based on the Enterprise Value to EBITDA ratio.
91.67% of the companies in the same industry are more expensive than ERIC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.05 | ||
| EV/EBITDA | 7.1 |
4.3 Compensation for Growth
ERIC'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 ERIC may justify a higher PE ratio.
ERIC's earnings are expected to grow with 59.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y96.63%
EPS Next 3Y59.26%
5. Dividend
5.1 Amount
ERIC has a Yearly Dividend Yield of 3.04%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.28, ERIC pays a better dividend. On top of this ERIC pays more dividend than 89.58% of the companies listed in the same industry.
ERIC's Dividend Yield is a higher than the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
5.2 History
The dividend of ERIC is nicely growing with an annual growth rate of 22.02%!
ERIC has paid a dividend for at least 10 years, which is a reliable track record.
As ERIC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)22.02%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
ERIC pays out 37.84% of its income as dividend. This is a sustainable payout ratio.
The dividend of ERIC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.84%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
9.72
-0.13 (-1.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners54.97%
Inst Owner Change-17.44%
Ins Owners0.07%
Ins Owner ChangeN/A
Market Cap32.40B
Revenue(TTM)240.31B
Net Income(TTM)24.64B
Analysts56.55
Price Target9.13 (-6.07%)
Short Float %1.05%
Short Ratio2.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
Yearly Dividend0.29
Dividend Growth(5Y)22.02%
DP37.84%
Div Incr Years5
Div Non Decr Years5
Ex-Date
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)7.95%
PT rev (3m)10.83%
EPS NQ rev (1m)21.99%
EPS NQ rev (3m)14.05%
EPS NY rev (1m)20.53%
EPS NY rev (3m)21.92%
Revenue NQ rev (1m)0.72%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-1.38%
Revenue NY rev (3m)-1.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.8 | ||
| Fwd PE | 13.84 | ||
| P/S | 1.27 | ||
| P/FCF | 10.05 | ||
| P/OCF | 9 | ||
| P/B | 2.98 | ||
| P/tB | 6.81 | ||
| EV/EBITDA | 7.1 |
EPS(TTM)0.9
EY9.26%
EPS(NY)0.7
Fwd EY7.22%
FCF(TTM)0.97
FCFY9.95%
OCF(TTM)1.08
OCFY11.12%
SpS7.65
BVpS3.27
TBVpS1.43
PEG (NY)0.03
PEG (5Y)N/A
Graham Number8.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.72% | ||
| ROE | 24.01% | ||
| ROCE | 19.24% | ||
| ROIC | 15.2% | ||
| ROICexc | 22.2% | ||
| ROICexgc | 46.36% | ||
| 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)10.59%
ROIC(5y)12.19%
ROICexc(3y)14.83%
ROICexc(5y)17.86%
ROICexgc(3y)47.09%
ROICexgc(5y)43.4%
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
WACC6.64%
ROIC/WACC2.29
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 Y348.24%
EPS Next 2Y96.63%
EPS Next 3Y59.26%
EPS Next 5Y30.26%
Revenue 1Y (TTM)-2.65%
Revenue growth 3Y2.19%
Revenue growth 5Y1.76%
Sales Q2Q%-8.99%
Revenue Next Year-4.89%
Revenue Next 2Y-2.58%
Revenue Next 3Y-1.15%
Revenue Next 5Y-0.91%
EBIT growth 1Y54.66%
EBIT growth 3Y-10.75%
EBIT growth 5Y16.26%
EBIT Next Year81.48%
EBIT Next 3Y20.93%
EBIT Next 5Y15.06%
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) TEL-SP ADR / ERIC FAQ
What is the fundamental rating for ERIC stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERIC.
Can you provide the valuation status for ERICSSON (LM) TEL-SP ADR?
ChartMill assigns a valuation rating of 9 / 10 to ERICSSON (LM) TEL-SP ADR (ERIC). This can be considered as Undervalued.
How profitable is ERICSSON (LM) TEL-SP ADR (ERIC) stock?
ERICSSON (LM) TEL-SP ADR (ERIC) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for ERIC stock?
The Price/Earnings (PE) ratio for ERICSSON (LM) TEL-SP ADR (ERIC) is 10.8 and the Price/Book (PB) ratio is 2.98.
Can you provide the financial health for ERIC stock?
The financial health rating of ERICSSON (LM) TEL-SP ADR (ERIC) is 4 / 10.