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Telefonaktiebolaget L M Ericsson Class B ERIC B

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Stock XSTO Rating as of
SEK 55.66 −0.20 (0.36%)
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As of Delayed Price Open
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Company Report

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Ericsson Earnings: Revenue Remains Terrible but There Are Some Signs of Improvement

Matthew Dolgin

Ericsson's steep revenue declines continued during the first quarter, which we attribute to the ongoing pullback in mobile carrier spending globally rather than company-specific challenges. However, margins were generally good, cash flow was strong, and North America appears to be stabilizing. We don't believe the global market for mobile network equipment will continue shrinking, which makes Ericsson's stock much too beaten up in our view, as we are maintaining our SEK 92 fair value estimate.

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Price vs Fair Value

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ERIC B is trading at a 39% discount.
Price
SEK 55.86
Fair Value
SEK 94.00
Uncertainty
Medium
1-Star Price
SEK 887.90
5-Star Price
SEK 69.80
Economic Moat
Ptq
Capital Allocation
Rfszwwnfb

Bulls Say, Bears Say

Bulls

Early success and market share gains at the onset of 5G network rollouts will build on itself and lock Ericsson in as a preferred vendor for many wireless firms throughout the 5G cycle.

Bears

The customer base remains concentrated with wireless carriers, who typically use multiple vendors and have significant buying power, limiting Ericsson’s pricing power.

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Trading Information

Previous Close Price
SEK 55.86
Day Range
SEK 55.36–55.84
52-Week Range
SEK 48.53–65.33
Bid/Ask
SEK 55.66 / SEK 55.70
Market Cap
SEK 185.66 Bil
Volume/Avg
1.2 Mil / 8.8 Mil

Key Statistics

Price/Earnings (Normalized)
13.77
Price/Sales
0.73
Dividend Yield (Trailing)
4.83%
Dividend Yield (Forward)
4.83%
Total Yield
4.83%

Company Profile

Ericsson provides telecom equipment and services that are primarily used to build and facilitate mobile networks through operations in three segments: networks, cloud and software services, and enterprises. The firm's customers have historically been primarily wireless carriers, but the firm is making a push to cater more to other enterprises as well, both as they try to take advantage of 5G capabilities and on other “as-a-service” communications platforms. The company also licenses its patents to handset manufacturers so their devices are compatible with wireless networks.
Sector
Technology
Industry
Communication Equipment
Stock Style Box
Large Core
Total Number of Employees
99,952
Website
https://www.ericsson.com

Competitors

Valuation

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Metric
ERIC B
CSCO
Price/Earnings (Normalized)
 13.7711.59
Price/Book Value
 1.714.18
Price/Sales
 0.733.41
Price/Cash Flow
 10.5812.10
Price/Earnings
ERIC B
CSCO

Financial Strength

Metric
ERIC B
CSCO
Quick Ratio
 0.941.10
Current Ratio
 1.221.37
Interest Coverage
 −5.8333.76
Quick Ratio
ERIC B
CSCO

Profitability

Metric
ERIC B
CSCO
Return on Assets (Normalized)
 2.26%17.02%
Return on Equity (Normalized)
 6.25%38.38%
Return on Invested Capital (Normalized)
 5.18%30.59%
Return on Assets
ERIC B
CSCO
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Telefonaktiebolaget L M Ericsson ADRNhcyzyswBntw$17.0 Bil
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Telefonaktiebolaget L M Ericsson Class BZXjb$16.7 Bil
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