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

• Market Cap: kr271.85B
• Dividend Yield: 3.51%
• Average Volume (3M): 5.06M
• Price to Earnings (P/E): 169.0
• Beta (1Y): 0.97
• Revenue Growth: -1.79%
• EPS Growth: N/A
• Country: SE
• Employees: 92,866
• Sector: Technology
• Sector Strength: 79
• Industry: Communication Equipment
• EPS (TTM): 1.24
• Shares Outstanding: 3,086,495,800
• 10 Day Avg. Volume: 4,802,263
• 30 Day Avg. Volume: 5,058,565
• PEG Ratio: -0.62
• Price to Book (P/B): 1.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.22
• 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: kr73.89
• Price Target Upside: -8.46% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 9

• Rating: 59 Neutral
• 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 Business Overview & Revenue Model

Company Description

Telefonaktiebolaget 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 Money

Ericsson 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

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

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

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
249.58B	247.88B	263.35B	271.55B	232.31B	232.39B
	Gross Profit
113.71B	109.36B	104.40B	113.30B	100.75B	93.72B
	EBIT
22.05B	6.24B	80.00M	27.08B	31.78B	27.81B
	EBITDA
45.74B	16.16B	-9.96B	35.10B	38.37B	36.80B
	Net Income Common Stockholders
1.61B	20.00M	-26.45B	18.72B	22.69B	17.48B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
52.13B	60.76B	44.77B	47.09B	66.98B	50.43B
	Total Assets
277.98B	292.37B	310.14B	349.54B	305.61B	271.53B
	Total Debt
42.42B	45.54B	54.33B	42.23B	41.13B	39.46B
	Net Debt
-2.17B	1.65B	19.14B	3.88B	-12.92B	-4.15B
	Total Liabilities
193.12B	199.39B	212.73B	216.23B	198.51B	186.35B
	Stockholders Equity
86.04B	94.28B	98.67B	134.81B	108.78B	86.67B
Cash Flow		Free Cash Flow
42.02B	42.62B	1.71B	24.67B	34.44B	23.62B
	Operating Cash Flow
45.54B	46.26B	7.18B	30.86B	39.06B	28.93B
	Investing Cash Flow
-13.31B	-15.95B	-8.71B	-34.40B	-19.88B	-15.20B
	Financing Cash Flow
-16.10B	-23.86B	1.01B	-15.93B	-9.31B	-12.49B

Telefonaktiebolaget LM Ericsson Class B Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 80.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HEXA.B	68 Neutral	kr256.36B	22.21	9.32%	17.56%	-1.12%	14.34%
NETI.B	68 Neutral	kr1.20B	28.94	6.63%	―	0.86%	-32.38%
HTRO	67 Neutral	kr5.23B	13.85	9.71%	―	13.10%	-46.33%
EPEN	67 Neutral	kr3.51B	22.90	10.90%	1.14%	-9.87%	-29.55%
Sector *	62 Neutral	$11.97B	10.08	-7.46%	2.96%	7.37%	-8.22%
ERIC.B	59 Neutral	kr271.85B	169.02	1.65%	3.51%	-1.79%	―
MAVEN	55 Neutral	kr390.04M	1,947.62	-6.45%	1.39%	-20.56%	-99.26%