ERIC
Telefonaktiebolaget LM Ericsson
$9.57
▼ 0.2%Updated Today 3:42 PM ET
ERIC at a glance — five pillars scored 0–100 from real filed financials.
Overall: Neutral · 54/100. A wider, greener shape means more pillars look healthy. Dividends scores 0 when a company pays none — that is a choice, not a flaw.
▲ Up 28.2% over the last 12 months
Market Cap
$33.72B
P/E
12.29x
Forward P/E (est.)
8.78x
ROE
25.1%
Revenue Growth
-7.4%
EPS Growth
1469.1%
Profit Margin
10.9%
FCF Yield
-30.0%
Debt / Equity
0.37x
ROIC
22.0%
Interest Coverage
12.68x
Current Ratio
1.29x
Dividend Yield
2.8%
Implied Growth (rev. DCF)
0.4%
Rating Score
54/100
Telefonaktiebolaget LM Ericsson (ERIC) is a large-cap company in the Communications industry, part of the Communication Services sector of the S&P 500, with a market value around $33.72B.
In its latest reported year it generated about $22.48B in revenue and $2.70B in net profit.
Our model rates ERIC Neutral (54/100) on growth, profitability, financial health, and valuation. The summary below is built from its filed financials and current ratios and refreshes automatically.
Evidence of durable competitive advantage in the filed financials (10 years of history).
Some durable-advantage evidence, but not across the board — dig into which ingredient is weak and whether it's cyclical or structural.
43.4% average over the last 3 years
±7.0 pts around 37.8% across 10 years
grew in 4 of the last 9 year-over-year periods
positive in 10 of 10 years
22.0% latest fiscal year
A moat can't be proven by numbers alone — this scores the evidence a durable advantage leaves behind (pricing power, consistency, returns on capital), computed the same way for every stock. Pair it with the business overview before concluding anything.
Technical analysis reads price and volume to judge momentum and timing. It complements the fundamentals above — it does not replace them. Here is what ERIC's chart says today, with each tool explained.
Trend — moving averages. A moving average is the average closing price over a window, which smooths out daily noise. ERIC trades near $9.57, below its 50-day average ($12.08) and 200-day average ($10.64). Price below both averages is a downtrend — momentum is against buyers for now.
Momentum — RSI. The Relative Strength Index runs 0–100 and measures how strong recent gains are versus losses. Above 70 is "overbought", below 30 "oversold". At 26 it is oversold — selling has been heavy and a bounce is possible.
MACD. MACD compares two moving averages to flag shifts in momentum. Its histogram is currently negative — short-term momentum is fading.
Volatility — ATR. Average True Range is the typical daily move. ERIC's is $0.32 (~3.3% of price), so swings of about that size each day are normal — handy for setting a stop that isn't too tight.
Support & resistance. Over the last month ERIC found buyers near $10.72 (support) and sellers near $13.09 (resistance); its 52-week range is $7.16–$13.77. A decisive break beyond either edge often marks the next move.
Volume. The latest session traded 0.6× the 20-day average — lighter than usual, so the move carries less conviction. Rising volume on up-days suggests real buying; on down-days, real selling.
Educational information to help you read a chart — not a recommendation or a forecast. It updates daily as the price and indicators change.
4Y CAGR
0.5%
Revenue moved from $20.93B in 2016 to $22.48B in 2025, a 0.8% compound annual growth rate. The most recent year declined 7.4% year over year. Shrinking revenue is worth a closer look — is it cyclical or structural?
Gross Margin
47.6%
Operating Margin
16.3%
Net Margin
12.0%
ROE
25.1%
Telefonaktiebolaget LM Ericsson keeps about 10.9% of each sales dollar as net profit, with a 47.6% gross margin and 16.3% operating margin. Return on equity is 25.1% and return on invested capital about 22.0%. Margins are moderate — typical of a competitive but profitable business.
Total Debt
$2.77B
Net Debt
-$1.40B
Net cash position
Net Debt / EBITDA
-0.38x
Debt / Equity
0.37x
Leverage: debt-to-equity is 0.4x, and operating profit covers interest about 12.7x, with a current ratio of 1.3x. That is a conservative balance sheet — a cushion in downturns. It carries roughly $2.77B of total debt against $4.17B of cash.
Operating CF
$3.13B
Free Cash Flow
$2.88B
FCF Margin
12.8%
In the latest year Telefonaktiebolaget LM Ericsson produced about $3.13B of operating cash flow and $2.88B of free cash flow after capital spending. That is a free-cash-flow yield of about -30.0% on today's price. Cash flow is what ultimately pays shareholders, so it is worth tracking over time.
Can the payout survive a bad year? Scored from filed cash flow, earnings coverage, and the raise/cut record.
The payout is comfortably covered by cash the business actually generates, with a raise habit behind it.
Dividend yield
2.8%
Per share (latest FY)
$0.27
Total paid (latest FY)
$906.77M
History on record
10 years
dividend uses 31% of free cash flow
34% of net income paid out
total dividends increased 8 years in a row
payout was cut at least once in the last 10 years
Coverage uses the latest fiscal year as filed with the SEC; the streak counts total dollars paid (per-share figures can carry split artifacts). Educational information, not income advice.
P/E
12.29x
P/S
1.49x
P/B
2.42x
EV / EBITDA
7.15x
ERIC trades at 12.3x trailing earnings (about 8.8x on estimated forward earnings), 1.5x sales, and 2.4x book value. Reverse-engineering today's price implies the market expects roughly 0.4% long-term free-cash-flow growth. That is an undemanding multiple — potentially cheap if the business is stable.
A two-stage discounted cash flow on real SEC-filed free cash flow — the intrinsic-value anchor professional analysts triangulate from.
DCF fair value / share
$16,236.08
Current price
$9.57
Starting FCF (latest 10-K)
$2.88B
Growth, years 1–5
-5.0%
Fade to terminal, years 6–10
2.5%
Discount rate
9.0%
Cash flows grow at the stage-1 rate (trailing revenue growth, capped at 20%) for five years, fade to 2.5% by year 10, and continue at that rate forever (Gordon terminal value), all discounted at 9.0%. Small changes in assumptions move the result a lot — treat this as one reference point, not a target price. Educational only, not investment advice.
Where ERIC sits versus its Communication Services sector peers in the S&P 500.
Bands show the middle half (25th–75th percentile) of the 44 Communication Services companies in the S&P 500 — the peer-relative anchor professional comps analysis uses. Context only — not investment advice.
How ERIC stacks up against its Communication Services peers — valuation, profitability, and growth versus the sector median.
In the Communication Services sector (95 S&P 500 companies), ERIC ranks #22 of 95 by our overall rating. It trades at a discount versus the sector on earnings (12.3x P/E vs. 18.1x median) with a higher return on equity (25.1% vs. 14.9%) and slower revenue growth (-7.4% vs. 5.3%).
P/E vs sector
12.3x
median 18.1x
ROE vs sector
25.1%
median 14.9%
Growth vs sector
-7.4%
median 5.3%
Sector rank
#22
of 95 by rating
Valuation vs. quality map
The sweet spot is upper-left: more profitable (higher ROE) for a lower P/E. Dashed lines mark the sector median.
Peers are the closest Communication Services companies by sub-industry and size. Sector median is across all 95 S&P 500 names in the sector. Educational, not a recommendation.
Project revenue → earnings → price. Edit the assumptions to build your own case.
2030 price target (Base Case)
$0.00 – $0.00
vs. $9.57 today · expected CAGR -8% – 2%
| Metric | 2026 | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|---|
| Revenue | $23.16B | $23.85B | $24.57B | $25.31B | $26.07B |
| Net income | $2.78B | $2.86B | $2.95B | $3.04B | $3.13B |
| EPS | $0.79 | $0.81 | $0.84 | $0.86 | $0.89 |
| Share price (low) | $5.52 | $5.69 | $5.86 | $6.03 | $6.21 |
| Share price (high) | $9.47 | $9.75 | $10.04 | $10.34 | $10.65 |
| CAGR (low–high) | -42% / -1% | -23% / 1% | -15% / 2% | -11% / 2% | -8% / 2% |
Educational model on sample fundamentals — not a forecast or investment advice. Outputs are only as good as your assumptions.
The case for ERIC:
- Strong return on equity (25.1%) shows capital is put to work well.
- A conservative balance sheet (debt/equity 0.4x) lowers risk.
- Pays a 2.8% dividend on top of any price gains.
The case against ERIC:
- Revenue growth is slow/negative (-7.4%), limiting the upside engine.
- Limited free cash flow at today's price.
Growth risk — sluggish revenue (-7.4%) leaves little margin for execution missteps.
Market risk — sector rotation, the economic cycle, and broad sentiment move the stock regardless of fundamentals.
On balance, the picture is mixed: Telefonaktiebolaget LM Ericsson is a large-cap communication services business with shrinking revenue, with modest profitability, and a sound balance sheet. It trades at 12.3x earnings, which our model scores Neutral (54/100). Weigh this against your own goals and time horizon — this is educational information, not a recommendation.
Analyst Ratings
What 28 Wall Street analysts covering ERIC recommend (July 2026). Consensus is a useful sanity check — not a substitute for your own homework.
Analysts have turned more cautious over the last three months (-3 pts of buy ratings).
Latest SEC Filings
ERIC's most recent filings, straight from SEC EDGAR. Annual and quarterly reports are the deep dives; 8-Ks flag material events the moment they happen.
In the Idea Lab
ERIC — frequently asked questions
Is ERIC a good stock to buy?
We don't give buy or sell advice. Our model rates Telefonaktiebolaget LM Ericsson Neutral (54/100) based on its growth, profitability, financial health, and valuation — use that as a research starting point and make your own decision.
What is ERIC's rating on The Stocks School?
Telefonaktiebolaget LM Ericsson currently scores 54/100 (Neutral) on our transparent model, which weighs real fundamentals: growth, margins, returns on capital, balance-sheet strength, and valuation.
How our ratings work →Where does ERIC's data come from?
Live price data plus real fundamentals and 5-year financials pulled directly from Telefonaktiebolaget LM Ericsson's SEC filings — refreshed automatically, not hand-entered.
How is the 5-year projection for ERIC calculated?
It's a scenario model: it grows revenue at an assumed rate, applies a profit margin and a valuation multiple, and shows the resulting share-price range. The assumptions are yours to change — it's a tool for thinking, not a prediction.
Is this ERIC analysis financial advice?
No. Everything on this page is educational research, not financial advice or a recommendation to buy or sell ERIC. Always do your own research and consider a licensed professional.
Data notice. Fundamentals and financial statements are sourced from company filings (SEC EDGAR) and market-data providers; prices and market caps refresh on trading days and may be delayed. Ratings, projections, technical signals, and written summaries are model- or rule-generated for education and may simplify or lag the latest filings.
Not advice. Nothing on this page is investment advice or a recommendation to buy, hold, or sell any security. Do your own research and consult a licensed financial professional before investing.