Telefonaktiebolaget LM Ericsson Class B (ERIC.B) AI Stock Analysis

• Market Cap: kr240.26B
• Dividend Yield: 3.89%
• Average Volume (3M): 7.01M
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.89
• Revenue Growth: -1.47%
• EPS Growth: N/A
• Country: SE
• Employees: 92,866
• Sector: Technology
• Sector Strength: 92
• Industry: Communication Equipment
• EPS (TTM): 1.37
• Shares Outstanding: 3,109,595,700
• 10 Day Avg. Volume: 10,932,991
• 30 Day Avg. Volume: 7,005,560
• PEG Ratio: 0.01
• Price to Book (P/B): 2.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.51
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: kr81.25
• Price Target Upside: 13.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 63 Neutral
• Price Target: kr77.00 ▲(7.69%Upside)

Telefonaktiebolaget LM Ericsson Class B's stock score is primarily influenced by its stable financial performance, showcasing strong cash flows and prudent balance sheet management. However, negative technical indicators reflect bearish market sentiment, dragging down the overall score. The stock's valuation is neutral, offering a reasonable P/E ratio and a modest dividend yield. The absence of earnings call and corporate events data limits further analysis.

Telefonaktiebolaget LM Ericsson Class B Business Overview & Revenue Model

Company Description

Telefonaktiebolaget 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 Money

Ericsson generates revenue through several key streams: network infrastructure, digital services, managed services, and emerging business areas. The network infrastructure segment, which includes products for mobile networks such as radio access and transport solutions, is the largest contributor to the company’s earnings. Digital services revenue comes from offerings like BSS (Business Support Systems), OSS (Operational Support Systems), cloud and core networks, providing solutions that help telecom operators manage their networks and services. Managed services involve outsourcing network operations and optimization to Ericsson, generating revenue through long-term contracts with operators to maintain and improve their networks' performance. Additionally, Ericsson invests in emerging technologies such as 5G and IoT, which are expected to drive future growth. Strategic partnerships with telecom operators and enterprises further bolster Ericsson's revenue by expanding its global reach and customer base.

Telefonaktiebolaget LM Ericsson Class B Financial Statement Overview

Summary

Overall, Telefonaktiebolaget LM Ericsson Class B presents a stable financial picture with strong cash flow generation and a solid balance sheet. The income statement shows areas for improvement, particularly in revenue growth and net profit margins. However, the company's effective cash flow management and prudent leverage position it well within the industry, allowing for potential growth and resilience against market fluctuations.

Income Statement

The income statement shows a mixed performance. The TTM data reflects a gross profit margin of 46.52%, showing good profitability. However, the net profit margin is 7.04%, indicating modest profitability relative to revenue. Revenue has been declining, with a noticeable drop from the previous year, impacting overall growth trends. The EBIT margin for TTM is strong at 11.46%, yet EBITDA margin is lower at 9.51%, reflecting potential inefficiencies or increased costs.

Balance Sheet

The balance sheet reflects stable financial health with a debt-to-equity ratio of 0.50, indicating moderate leverage. The return on equity (ROE) is 19.95%, which is strong and suggests efficient use of equity. The equity ratio is 32.07%, demonstrating a solid capital structure. Overall, the balance sheet shows a well-managed financial position with a good balance between debt and equity.

Cash Flow

Cash flow analysis shows robust cash generation with a free cash flow of SEK 37.03 billion in the TTM period. The operating cash flow to net income ratio is high at 2.34, indicating strong cash conversion from profits. Free cash flow to net income ratio is also healthy at 2.14, reflecting efficient cash flow management. Despite past fluctuations, current cash flows are strong and support the company's financial stability.

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	104.40B	113.30B	100.75B	93.72B
EBITDA	16.16B	-9.96B	35.10B	38.37B	36.80B
Net Income	20.00M	-26.45B	18.72B	22.69B	17.48B
Balance Sheet
Total Assets	292.37B	310.14B	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	212.73B	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	1.71B	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 Class B Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 71.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ERIC.B, the sentiment is Negative. The current price of 71.5 is below the 20-day moving average (MA) of 76.16, below the 50-day MA of 79.65, and below the 200-day MA of 83.37, indicating a bearish trend. The MACD of -2.49 indicates Positive momentum. The RSI at 26.87 is Positive, neither overbought nor oversold. The STOCH value of 25.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:ERIC.B.

Telefonaktiebolaget LM Ericsson Class B Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ERIC.B	63 Neutral	kr240.26B	13.77	20.29%	3.89%	-1.47%	―
Sector *	50 Neutral	C$3.13B	2.46	-63.57%	2.58%	4.49%	-6.00%
0GRX	―	kr302.80B	27.83	9.27%	0.02%	―	―
0GT8	―	kr3.89B	27.87	9.07%	1.04%	―	―
02H0	―	€395.06M	12.50	9.42%	―	―	―
96W	―	€46.39M	1,870.00	-6.07%	1.32%	―	―
NSGB	―	€126.30M	1,695.00	0.15%	―	―	―