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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:53Neutral
Price Target:
kr82.00
▲(0.10%Upside)
The overall stock score is primarily influenced by mixed financial performance and bearish technical indicators. Strong cash flow generation and a stable balance sheet are positive factors, but profitability challenges and a high P/E ratio weigh heavily on the score. The technical analysis suggests a neutral to bearish outlook, while the valuation indicates potential overvaluation despite a decent dividend yield.

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 (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 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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue249.58B247.88B263.35B271.55B232.31B232.39B
Gross Profit113.71B109.36B104.40B113.30B100.75B93.72B
EBITDA45.74B16.16B-9.96B35.10B38.37B36.80B
Net Income1.61B20.00M-26.45B18.72B22.69B17.48B
Balance Sheet
Total Assets277.98B292.37B310.14B349.54B305.61B271.53B
Cash, Cash Equivalents and Short-Term Investments52.13B60.76B44.77B47.09B66.98B50.43B
Total Debt42.42B45.54B54.33B42.23B41.13B39.46B
Total Liabilities193.12B199.39B212.73B216.23B198.51B186.35B
Stockholders Equity86.04B94.28B98.67B134.81B108.78B86.67B
Cash Flow
Free Cash Flow42.02B42.62B1.71B24.67B34.44B23.62B
Operating Cash Flow45.54B46.26B7.18B30.86B39.06B28.93B
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
Positive
Last Price81.92
Price Trends
50DMA
81.58
Positive
100DMA
81.19
Positive
200DMA
83.38
Negative
Market Momentum
MACD
-0.03
Negative
RSI
54.03
Neutral
STOCH
91.92
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:ERIC.B, the sentiment is Positive. The current price of 81.92 is above the 20-day moving average (MA) of 80.93, above the 50-day MA of 81.58, and below the 200-day MA of 83.38, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 54.03 is Neutral, neither overbought nor oversold. The STOCH value of 91.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:ERIC.B.

Telefonaktiebolaget LM Ericsson Class B Peers Comparison

Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
¥229.24B14.267.64%2.72%9.14%8.60%
53
Neutral
kr275.13B169.851.65%3.49%-1.79%
kr255.77B22.719.32%17.84%
kr3.72B24.2610.90%10.34%
€544.29M16.909.71%
DE96W
€39.69M1,870.00-6.45%1.32%
€124.28M32.176.63%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SE:ERIC.B
Telefonaktiebolaget LM Ericsson Class B
81.92
16.36
24.94%
GB:0GRX
Hexagon AB
94.32
-25.02
-20.97%
GB:0GT8
Beijer Electronics Group AB
115.70
2.63
2.33%
DE:02H0
Hexatronic Group AB
2.68
-2.02
-42.98%
DE:96W
Maven Wireless Sweden AB
0.74
-0.69
-48.25%
DE:NSGB
Net Insight AB Class B
0.34
-0.19
-35.85%
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.Date of analysis: Jul 01, 2025