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Telefonaktiebolaget LM Ericsson Class B (ERIC)
NASDAQ:ERIC
RESEARCH TOOLSreports
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Telefonaktiebolaget LM Ericsson
(NASDAQ:ERIC)
Rating:64Neutral
Price Target:
$8.00
▲(10.34%Upside)
Telefonaktiebolaget LM Ericsson (ERIC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.41B
Dividend Yield0.37%
Average Volume (3M)19.98M
Price to Earnings (P/E)14.5
Beta (1Y)0.64
Revenue Growth0.98%
EPS GrowthN/A
CountryUS
Employees92,866
SectorTechnology
Sector Strength91
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.14
Shares Outstanding3,109,595,700
10 Day Avg. Volume14,970,122
30 Day Avg. Volume19,975,269
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue0.12
Enterprise Value/Gross Profit0.25
Enterprise Value/Ebitda1.35
Forecast
1Y Price Target
$8.45Price Target Upside16.55% Upside
Rating ConsensusHold
Number of Analyst Covering3
Telefonaktiebolaget LM Ericsson Business Overview & Revenue Model
Company DescriptionTelefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecom and other sectors. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment offers radio access network solutions for various network spectrum bands, including integrated high-performing hardware and software. This segment also provides integrated antenna and transport solutions; and a range of service portfolio covering network deployment and support. The Digital Services segment offers software-based solutions for business support systems, operational support systems, communication services, core networks, and cloud infrastructure. The Managed Services segment provides networks and IT managed, network design and optimization, and application development and maintenance services to telecom operators. The Emerging Business and Other segment includes emerging businesses comprising Internet of Things; iconectiv; Cradlepoint that offers wireless edge WAN 4G and 5G enterprise solutions; and Red Bee Media, MediaKind, and other new businesses. It operates in North America, Europe and Latin America, the Middle East and Africa, South East Asia, Oceania, India, North East Asia, and internationally. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
How the Company Makes MoneyEricsson generates revenue primarily through its four business segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment is the largest contributor, providing solutions for mobile networks, including 5G, 4G, and 3G radio access networks and related services. Digital Services offers software and services for operators to transform their operations, including OSS/BSS, cloud infrastructure, and telecom core solutions. Managed Services provides outsourced network operations and services, helping telecom operators manage their networks efficiently. The Emerging Business and Other segment explores new growth areas such as IoT, edge computing, and private networks. Key revenue streams include sales of hardware and software, service contracts, and licensing of intellectual property. Ericsson also collaborates with global telecom operators, enterprises, and governments, which significantly contribute to its revenue through long-term contracts and strategic partnerships.
Telefonaktiebolaget LM Ericsson Earnings Call Summary
Earnings Call Date:Jul 15, 2025
(Q2-2025)
| % Change Since: -7.53%|
Next Earnings Date:Oct 14, 2025
Earnings Call Sentiment Neutral
While Ericsson demonstrated strong performance in North America and achieved a high EBITA margin, challenges such as significant sales decline in Asia and currency impacts are concerning. The strategic initiatives and growth in IPR revenue are positive signs but are counterbalanced by these challenges.Q2-2025 Updates
Positive Updates
Positive EBITA Margin and Organic Growth
Ericsson reported a 2% organic growth and a 3-year high EBITA margin of 13.2%. This growth was broad-based across all segments, indicating strong execution of strategic priorities.
Strong Performance in the Americas
Sales in the Americas increased by 10% year-over-year, with significant growth in North America, attributed to previous contract wins.
Improvement in IPR Revenue
IPR revenue increased significantly to SEK 4.9 billion in Q2 from SEK 3.2 billion in Q1, contributing to the overall revenue growth.
Negative Updates
Sales Decline in Asia and Latin America
Sales in South East Asia, Australia, Oceania, and India decreased by 22% year-over-year, and sales in Latin America were negatively impacted by intense competition.
Negative Currency Impact
There was a currency impact of SEK 4.7 billion due to the strengthening of the Swedish krona against the U.S. dollar and other currencies, affecting reported sales.
Company Guidance
During Ericsson's second quarter 2025 earnings call, the company highlighted several key performance metrics and strategic initiatives. Organic sales grew by 2% year-over-year, with notable growth in the Americas market area, despite facing SEK 5 billion in foreign exchange headwinds. The gross margin improved to 48%, and the EBITA margin reached a 3-year high of 13.2%. Ericsson also achieved a fifth consecutive quarter of positive EBITA in Cloud Software and Services. The company emphasized its strategic focus on 5G stand-alone networks, with a promising use case in fixed wireless access, which has over 160 million subscribers. Ericsson is also expanding its focus on AI, establishing an AI factory consortium in Sweden to leverage cutting-edge technology. Despite geopolitical and trade challenges, Ericsson expects the RAN market to remain stable for the rest of the year, with growth driven by new monetization opportunities such as network APIs. The company is committed to cost reduction, having reduced its workforce by 6% over the past year, and continues to invest in technology leadership to manage market fluctuations and support long-term growth.Telefonaktiebolaget LM Ericsson Financial Statement Overview
Summary
Telefonaktiebolaget LM Ericsson demonstrates stable financial health with moderate profitability and efficient cash flow management. The company maintains operational efficiency and a strong balance sheet, positioning it well within the industry, despite challenges in net income growth.Income Statement
The income statement shows a moderate performance with a gross profit margin of 45.56% TTM and a net profit margin of 0.64% TTM, indicating stable profitability despite low net income. The EBIT margin improved to 8.83% TTM, and the EBITDA margin reached 18.51% TTM, showing operational efficiency. Revenue growth was slightly positive at 0.68% TTM, demonstrating steady revenue generation.70
Positive
Balance Sheet
The balance sheet reflects a solid financial position with a debt-to-equity ratio of 0.49 TTM, indicating manageable leverage. The equity ratio is 30.95% TTM, showcasing a balanced capital structure. However, return on equity is relatively low at 1.87% TTM, suggesting limited returns on shareholder investments.65
Positive
Cash Flow
The cash flow statement highlights robust cash generation with a free cash flow growth rate of -1.42% TTM, which is stable year-over-year. The operating cash flow to net income ratio is strong at 28.28 TTM, and the free cash flow to net income ratio is substantial at 26.10 TTM, indicating efficient conversion of income to cash.75
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 247.88B | 263.35B | 271.55B | 232.31B | 232.39B |
| Gross Profit | 109.36B | 101.60B | 113.30B | 100.75B | 93.72B |
| EBITDA | 16.16B | 27.96B | 36.55B | 38.92B | 36.81B |
| Net Income | 20.00M | -26.45B | 18.72B | 22.69B | 17.48B |
Balance Sheet | |||||
| Total Assets | 292.37B | 297.04B | 349.54B | 305.61B | 271.53B |
| Cash, Cash Equivalents and Short-Term Investments | 60.76B | 44.77B | 47.09B | 66.98B | 50.43B |
| Total Debt | 45.54B | 54.33B | 42.23B | 41.13B | 39.46B |
| Total Liabilities | 199.39B | 199.63B | 216.23B | 198.51B | 186.35B |
| Stockholders Equity | 94.28B | 98.67B | 134.81B | 108.78B | 86.67B |
Cash Flow | |||||
| Free Cash Flow | 42.62B | 3.88B | 24.67B | 34.44B | 23.62B |
| Operating Cash Flow | 46.26B | 7.18B | 30.86B | 39.06B | 28.93B |
| Investing Cash Flow | -15.95B | -8.71B | -34.40B | -19.88B | -15.20B |
| Financing Cash Flow | -23.86B | 1.01B | -15.93B | -9.31B | -12.49B |
Telefonaktiebolaget LM Ericsson Technical Analysis
Negative
7.25
Price Trends
8.15
Negative
8.08
Negative
8.08
Negative
Market Momentum
-0.27
Positive
30.40
Neutral
13.80
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ERIC, the sentiment is Negative. The current price of 7.25 is below the 20-day moving average (MA) of 7.64, below the 50-day MA of 8.15, and below the 200-day MA of 8.08, indicating a bearish trend. The MACD of -0.27 indicates Positive momentum. The RSI at 30.40 is Neutral, neither overbought nor oversold. The STOCH value of 13.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ERIC.
Telefonaktiebolaget LM Ericsson Risk Analysis
Telefonaktiebolaget LM Ericsson disclosed 43 risk factors in its most recent earnings report. Telefonaktiebolaget LM Ericsson reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Telefonaktiebolaget LM Ericsson Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $72.89B | 36.43 | 189.18% | 0.97% | 7.45% | 46.78% | |
78 Outperform | $265.76B | 27.50 | 21.36% | 2.41% | 0.47% | -17.77% | |
73 Outperform | $25.99B | 20.47 | 6.39% | 2.62% | 11.63% | -24.41% | |
71 Outperform | $13.42B | 38.18 | 7.58% | 2.20% | -2.56% | 52.05% | |
64 Neutral | $24.41B | 14.46 | 19.63% | 0.37% | 0.98% | ― | |
57 Neutral | $21.65B | 20.79 | 4.31% | 3.53% | -2.39% | 157.33% | |
50 Neutral | AU$1.62B | 3.27 | -31.36% | 3.54% | 16.08% | -7.01% |
* Technology Sector Average
Performance Comparison
ERIC
Telefonaktiebolaget LM Ericsson
7.25
0.86
13.46%
CSCO
Cisco Systems
67.11
23.57
54.13%
JNPR
Juniper Networks
39.95
2.88
7.77%
MSI
Motorola Solutions
436.71
40.98
10.36%
NOK
Nokia
4.05
0.41
11.26%
HPE
Hewlett Packard Enterprise
19.81
2.95
17.50%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.