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Telefonaktiebolaget LM Ericsson Class B (SE:ERIC.B)
:ERIC.B

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

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Telefonaktiebolaget LM Ericsson Class B

(LSE:ERIC.B)

Rating:59Neutral
Price Target:
kr86.00
▲(6.54%Upside)
The overall stock score is primarily influenced by mixed financial performance and neutral technical indicators. High P/E ratio suggests overvaluation concerns, but a solid dividend yield provides some offsetting value.

Telefonaktiebolaget LM Ericsson Class B (ERIC.B) vs. iShares MSCI Sweden ETF (EWD)

Telefonaktiebolaget LM Ericsson Class B Business Overview & Revenue Model

Company DescriptionTelefonaktiebolaget LM Ericsson, commonly known as Ericsson, is a globally recognized leader in the telecommunications industry. Headquartered in Sweden, the company specializes in providing infrastructure, services, and software solutions for communication networks. Ericsson's core products include radio access networks, digital services, managed services, and emerging technologies like 5G, IoT, and cloud solutions. With a significant focus on innovation and a prominent role in setting global communication standards, Ericsson serves service providers, enterprises, and the public sector worldwide.
How the Company Makes MoneyEricsson generates revenue primarily through its Networks, Digital Services, Managed Services, and Emerging Business segments. The Networks segment is the largest contributor, driven by the sale of hardware and software for radio access and transport networks. The Digital Services segment provides telecom operators with solutions like OSS/BSS, cloud communication, and 5G core, generating income through software licensing and support services. Managed Services offer network operation and optimization services, providing stable, recurring revenue streams. Emerging Business, including IoT and technology licensing, contributes additional revenue. Strategic partnerships with telecom operators and enterprises, as well as participation in large-scale infrastructure projects, are significant factors enhancing Ericsson's earnings.

Telefonaktiebolaget LM Ericsson Class B Financial Statement Overview

Summary
Mixed financial performance with strong cash flow generation and a stable balance sheet, but challenges in profitability. The income statement indicates a need for improved cost management and profitability enhancement.
Income Statement
58
Neutral
The gross profit margin for TTM (Trailing-Twelve-Months) is approximately 45.56%, indicating solid profitability from core operations. The net profit margin stands at 0.64%, demonstrating a significant decline from previous years, suggesting challenges in managing costs or other expenses. Revenue has decreased over the past few years, with a slight positive growth in the most recent TTM period, indicating potential stabilization. EBIT and EBITDA margins show improvement, but overall profitability remains a concern.
Balance Sheet
65
Positive
The debt-to-equity ratio for TTM is 0.49, reflecting moderate leverage and a balanced financial structure. Return on equity (ROE) is low at 1.87%, suggesting the firm is generating minimal returns on shareholders' investments. The equity ratio is at 30.95%, indicating a solid equity base. Overall, the balance sheet shows stability, though profitability remains a challenge.
Cash Flow
72
Positive
Free cash flow has shown growth, with a robust operating cash flow to net income ratio of 28.29, indicating strong cash generation relative to accounting profit. The free cash flow to net income ratio is exceptionally high at 26.09, reflecting efficient cash utilization. The cash flow position is strong, providing resilience against earnings volatility.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
249.58B247.88B263.35B271.55B232.31B232.39B
Gross Profit
113.71B109.36B104.40B113.30B100.75B93.72B
EBIT
22.05B6.24B80.00M27.08B31.78B27.81B
EBITDA
45.74B16.16B-9.96B35.10B38.37B36.80B
Net Income Common Stockholders
1.61B20.00M-26.45B18.72B22.69B17.48B
Balance SheetCash, Cash Equivalents and Short-Term Investments
52.13B60.76B44.77B47.09B66.98B50.43B
Total Assets
277.98B292.37B310.14B349.54B305.61B271.53B
Total Debt
42.42B45.54B54.33B42.23B41.13B39.46B
Net Debt
-2.17B1.65B19.14B3.88B-12.92B-4.15B
Total Liabilities
193.12B199.39B212.73B216.23B198.51B186.35B
Stockholders Equity
86.04B94.28B98.67B134.81B108.78B86.67B
Cash FlowFree Cash Flow
42.02B42.62B1.71B24.67B34.44B23.62B
Operating Cash Flow
45.54B46.26B7.18B30.86B39.06B28.93B
Investing Cash Flow
-13.31B-15.95B-8.71B-34.40B-19.88B-15.20B
Financing Cash Flow
-16.10B-23.86B1.01B-15.93B-9.31B-12.49B

Telefonaktiebolaget LM Ericsson Class B Technical Analysis

Technical Analysis Sentiment
Negative
Last Price80.72
Price Trends
50DMA
79.78
Negative
100DMA
81.96
Negative
200DMA
82.85
Negative
Market Momentum
MACD
-0.04
Positive
RSI
39.60
Neutral
STOCH
13.06
Positive
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 80.72 is below the 20-day moving average (MA) of 82.85, above the 50-day MA of 79.78, and below the 200-day MA of 82.85, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 39.60 is Neutral, neither overbought nor oversold. The STOCH value of 13.06 is Positive, 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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
kr256.36B22.219.32%17.56%-1.12%14.34%
68
Neutral
kr1.20B28.946.63%0.86%-32.38%
67
Neutral
kr5.23B13.859.71%13.10%-46.33%
67
Neutral
kr3.51B22.9010.90%1.14%-9.87%-29.55%
62
Neutral
$11.97B10.08-7.46%2.96%7.37%-8.22%
59
Neutral
kr271.85B169.021.65%3.51%-1.79%
55
Neutral
kr390.04M1,947.62-6.45%1.39%-20.56%-99.26%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SE:ERIC.B
Telefonaktiebolaget LM Ericsson Class B
79.70
19.87
33.21%
SE:HEXA.B
Hexagon AB
92.24
-22.07
-19.31%
SE:EPEN
Beijer Electronics Group AB
104.00
-10.84
-9.44%
SE:HTRO
Hexatronic Group AB
25.08
-25.90
-50.80%
SE:MAVEN
Maven Wireless Sweden AB
7.64
-10.41
-57.67%
SE:NETI.B
Net Insight AB Class B
3.52
-1.60
-31.25%
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.