Ericsson's third-quarter net sales rose 6%, and EBITA margin expanded 4 percentage points year over year. Networks grew 9%, the first sales growth in over a year, buoyed by cellular hardware wins and intellectual property licensing.
ERIC B is trading within a range we consider fairly valued.
Price
SEK 102.90
Fair Value
LOCK|xg
Uncertainty
LOCK|#Yfjq
1-Star Price
LOCK|?k
5-Star Price
gQ<
Economic Moat
LOCK|Rj
Capital Allocation
LOCK|>lMtg&
Bulls Say, Bears Say
Bulls
Ericsson retains a dominant position in the US, which is the most profitable market for wireless networking equipment providers.
Bears
Carriers continue to try to commoditize portions of Ericsson’s product offerings. The latest attempt, ORAN, threatens to disaggregate software and hardware, making it easier for carriers to play vendors off each other.
Ericsson is a networking equipment and software provider, primarily selling mobile networking equipment and services to wireless service providers. Ericsson operates in three segments: networks, cloud software and services, and enterprise. While large wireless carriers are its largest customers, Ericsson has expanded its offerings for large enterprises. These products and services include private 5G networking, contact centers as a service, and application performance interfaces. Ericsson aims to combine its 5G network expertise with cloud-native, as-a-service platforms offering a more comprehensive hardware and software package. Ericsson also monetizes its research and development investments by licensing patents to handset manufacturers.