Telefonaktiebolaget LM Ericsson (publ) (ERIC), Discounted Cash Flow Valuation

Telefonaktiebolaget LM Ericsson (Publ) (Eric) Company Profile

SE | Technology | Communication Equipment | NASDAQ
8.105 -0.06 (-0.80%)
Real-Time Price (USD)
Market Cap A valuation method that multiplies the price of a company's shares by the total number of outstanding shares.
26.62B
Revenue (ttm) The total amount of income generated by the sale of goods or services related to the company's primary operations.
249.58B
Net Income (ttm) The company's earnings for a period net of operating costs, taxes and interest.
1.61B
Shares Out Total number of common shares outstanding as of the latest date disclosed in a financial filing.
3.34B
EPS (ttm) Company's net earnings or losses from continuing operations on a per diluted share basis.
0.47
PE Ratio The price-to-earnings (PE) ratio is the ratio between a company's stock price and earnings per share. It measures the price of a stock relative to its profits.
14.97K
Dividend Yield Measures the cash returned to shareholders by a firm as a percentage of the price they pay for each share of stock.
3.08%
Exchange Name of stock exchange where the trading item trades.
NASDAQ
Avg Volume The average number of shares traded each day over the past 30 days.
23.2M
Open The opening trade price over the trading day.
8.05
Previous Close The last closing price.
8.17
Beta A ratio that measures the risk or volatility of a company's share price in comparison to the market as a whole.
0.44
1 day delta The range between the high and low prices over the past day.
8.09-8.29
52 weeks The range between the high and low prices over the past 52 weeks.
5-8.9

Total Valuation

Telefonaktiebolaget LM Ericsson (publ) has a market cap or net worth of 262.02B. The enterprise value is 259.85B.
Market Cap (ttm) Market Capitalization
A valuation method that multiplies the price of a company's shares by the total number of outstanding shares.
262.02B
Enterprise Value (ttm) Enterprise Value
Enterprise value measures the total value of a company's outstanding shares, adjusted for debt and levels of cash and short-term investments.
Enterprise Value = Market Cap + Total Debt - Cash & Equivalents - Short-Term Investments
259.85B

Valuation Ratios

The trailing PE ratio is 162.72. Telefonaktiebolaget LM Ericsson (publ)'s PEG ratio is 1.63.
PE Ratio (ttm) PE Ratio
The price-to-earnings (P/E) ratio is a valuation metric that shows how expensive a stock is relative to earnings.
PE Ratio = Stock Price / Earnings Per Share
162.72
PS Ratio (ttm) PS Ratio
The price-to-sales (P/S) ratio is a commonly used valuation metric. It shows how expensive a stock is compared to revenue.
PS Ratio = Market Capitalization / Revenue
1.05
PB Ratio (ttm) PB Ratio
The price-to-book (P/B) ratio measures a stock's price relative to book value. Book value is also called Shareholders' equity.
PB Ratio = Market Capitalization / Shareholders' Equity
3.04
P/FCF Ratio (ttm) P/FCF Ratio
The price to free cash flow (P/FCF) ratio is similar to the P/E ratio, except it uses free cash flow instead of accounting earnings.
P/FCF Ratio = Market Capitalization / Free Cash Flow
6.24
PEG Ratio (ttm) PEG Ratio
The price/earnings to growth (PEG) ratio is calculated by dividing a company's PE ratio by its expected earnings growth.
PEG Ratio = PE Ratio / Expected Earnings Growth
1.63

Enterprise Valuation

The stock's EV/EBITDA ratio is 5.62, with a EV/FCF ratio of 6.18.
EV / Sales (ttm) EV / Sales Ratio
The enterprise value to sales (EV/Sales) ratio is similar to the price-to-sales ratio, but the price is adjusted for the company's debt and cash levels.
EV/Sales Ratio = Enterprise Value / Revenue
1.04
EV / EBITDA (ttm) EV / EBIT Ratio
The EV/EBITDA ratio measures a company's valuation relative to its EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization.
EV/EBITDA Ratio = Enterprise Value / EBITDA
5.62
EV / EBIT (ttm) EV/EBIT Ratio
The EV/EBIT is a valuation metric that measures a company's price relative to EBIT, or Earnings Before Interest and Taxes.
EV/EBIT Ratio = Enterprise Value / EBIT
5.71
EV / FCF (ttm) EV/FCF Ratio
The enterprise value to free cash flow (EV/FCF) ratio is similar to the price to free cash flow ratio, except the price is adjusted for the company's cash and debt.
EV/FCF Ratio = Enterprise Value / Free Cash Flow
6.18

Financial Efficiency

Return on equity (ROE) is 1.84% and return on invested capital (ROIC) is -11.25%.
Return on Equity (ROE) (ttm) Return on Equity (ROE)
Return on equity (ROE) is a profitability metric that shows how efficient a company is at using its equity (or "net" assets) to generate profits. It is calculated by dividing the company's net income by the average shareholders' equity over the past 12 months.
ROE = (Net Income / Average Shareholders' Equity) * 100%
1.84%
Return on Assets (ROA) (ttm) Return on Assets (ROA)
Return on assets (ROA) is a metric that measures how much profit a company is able to generate using its assets. It is calculated by dividing net income by the average total assets for the past 12 months.
ROA = (Net Income / Average Total Assets) * 100%
0.58%
Return on Capital (ROIC) (ttm) Return on Capital (ROIC)
Return on invested capital (ROIC) measures how effective a company is at investing its capital in order to increase profits. It is calculated by dividing the EBIT (Earnings Before Interest & Taxes) by the average invested capital in the previous year.
ROIC = (EBIT / Average Invested Capital) * 100%
-11.25%
Asset Turnover Asset Turnover
The asset turnover ratio measures the amount of sales relative to a company's assets. It indicates how efficiently the company uses its assets to generate revenue.
Asset Turnover Ratio = Revenue / Average Assets
0.85
Inventory Turnover (ttm) Inventory Turnover
The inventory turnover ratio measures how many times inventory has been sold and replaced during a time period.
Inventory Turnover Ratio = Cost of Revenue / Average Inventory
4.91

Margins

Trailing 12 months gross margin is 45.56%, with operating and profit margins of 8.83% and 0.65%.
Gross Margin (ttm) Gross Margin
Gross margin is the percentage of revenue left as gross profits, after subtracting cost of goods sold from the revenue.
Gross Margin = (Gross Profit / Revenue) * 100%
45.56%
Operating Margin (ttm) Operating Margin
Operating margin is the percentage of revenue left as operating income, after subtracting cost of revenue and all operating expenses from the revenue.
Operating Margin = (Operating Income / Revenue) * 100%
8.83%
Pretax Margin (ttm) Pretax Margin
Pretax margin is the percentage of revenue left as profits before subtracting taxes.
Pretax Margin = (Pretax Income / Revenue) * 100%
1.93%
Profit Margin (ttm) Profit Margin
Profit margin is the percentage of revenue left as net income, or profits, after subtracting all costs and expenses from the revenue.
Profit Margin = (Net Income / Revenue) * 100%
0.65%
EBITDA Margin (ttm) EBITDA Margin
EBITDA margin is the percentage of revenue left as EBITDA, after subtracting all expenses except interest, taxes, depreciation and amortization from revenue.
EBITDA Margin = (EBITDA / Revenue) * 100%
18.51%

Income Statement

In the last 12 months, Telefonaktiebolaget LM Ericsson (publ) had revenue of 249.58B and earned 1.61B in profits. Earnings per share (EPS) was 0.47.
Revenue (ttm) Revenue
Revenue is the amount of money a company receives from its main business activities, such as sales of products or services. Revenue is also called sales.
249.58B
Gross Profit (ttm) Gross Profit
Gross profit is a company’s profit after subtracting the costs directly linked to making and delivering its products and services.
Gross Profit = Revenue - Cost of Revenue
113.71B
Operating Income (ttm) Operating Income
Operating income is the amount of profit in a company after paying for all the expenses related to its core operations.
Operating Income = Revenue - Cost of Revenue - Operating Expenses
22.05B
Pretax Income (ttm) Pretax Income
Pretax income is a company's profits before accounting for income taxes.
Pretax Income = Net Income + Income Taxes
4.82B
Net Income (ttm) Net Income
Net income is a company's accounting profits after subtracting all costs and expenses from the revenue. It is also called earnings, profits or "the bottom line"
Net Income = Revenue - All Expenses
1.61B
EBITDA (ttm) EBITDA
EBITDA stands for "Earnings Before Interest, Taxes, Depreciation and Amortization." It is a commonly used measure of profitability.
EBITDA = Net Income + Interest + Taxes + Depreciation and Amortization
46.2B
EBIT (ttm) EBIT
EBIT stands for "Earnings Before Interest and Taxes" and is a commonly used measure of earnings or profits. It is similar to operating income.
EBIT = Net Income + Interest + Taxes
36.95B
Earnings Per Share (EPS) (ttm) EPS (Diluted)
Earnings per share is the portion of a company's profit that is allocated to each individual stock. Diluted EPS is calculated by dividing net income by "diluted" shares outstanding.
Diluted EPS = Net Income / Shares Outstanding (Diluted)
0.47

Financial Position

The company has a trailing 12 months (ttm) current ratio of 1.09, with a ttm Debt / Equity ratio of 0.49.
Current Ratio (ttm) Current Ratio
The current ratio is used to measure a company's short-term liquidity. A low number can indicate that a company will have trouble paying its upcoming liabilities.
Current Ratio = Current Assets / Current Liabilities
1.09
Quick Ratio (ttm) Quick Ratio
The quick ratio measure a company's short-term liquidity. A low number indicates that the company may have trouble paying its upcoming financial obligations.
Quick Ratio = (Cash + Short-Term Investments + Accounts Receivable) / Current Liabilities
0.88
Debt / Equity (ttm) Debt / Equity Ratio
The debt-to-equity ratio measures a company's debt levels relative to its shareholders' equity or book value. A high ratio implies that a company has a lot of debt.
Debt / Equity Ratio = Total Debt / Shareholders' Equity
0.49
Debt / EBIT (ttm) Debt / EBIT Ratio
The debt-to-EBIT ratio is a company's debt levels relative to its trailing twelve-month EBIT. A high ratio implies that debt is high relative to the company's earnings.
Debt / EBIT Ratio = Total Debt / EBIT (ttm)
0.22

Dividends & Yields

This stock pays an annual dividend of 2.78, which amounts to a dividend yield of 3.54%.
Dividend Per Share (ttm) Dividend Per Share
Total amount paid to each outstanding share in dividends during the period.
2.78
Dividend Yield (ttm) Dividend Yield
The dividend yield is how much a stock pays in dividends each year, as a percentage of the stock price.
Dividend Yield = (Annual Dividends Per Share / Stock Price) * 100%
3.54%
Earnings Yield (ttm) Earnings Yield
The earnings yield is a valuation metric that measures a company's profits relative to stock price, expressed as a percentage yield. It is the inverse of the P/E ratio.
Earnings Yield = (Earnings Per Share / Stock Price) * 100%
0.61%
FCF Yield (ttm) FCF Yield
The free cash flow (FCF) yield measures a company's free cash flow relative to its price, shown as a percentage. It is the inverse of the P/FCF ratio.
FCF Yield = (Free Cash Flow / Market Cap) * 100%
16.04%
Dividend Growth (YoY) Dividend Growth
The change in dividend payments per share, compared to the previous period.
Dividend Growth = ((Current Dividend / Previous Dividend) - 1) * 100%
2.60%
Payout Ratio (ttm) Payout Ratio
The payout ratio is the percentage of a company's profits that are paid out as dividends. A high ratio implies that the dividend payments may not be sustainable.
Payout Ratio = (Dividends Per Share / Earnings Per Share) * 100%
573.48%

Balance Sheet

The company has 44.59B in cash and 42.42B in debt, giving a net cash position of 2.17B.
Cash & Cash Equivalents Cash & Cash Equivalents
Cash and cash equivalents is the sum of "Cash & Equivalents" and "Short-Term Investments." This is the amount of money that a company has quick access to, assuming that the cash equivalents and short-term investments can be sold at a short notice.
Cash & Cash Equivalents = Cash & Equivalents + Short-Term Investments
44.59B
Total Debt Total Debt
Total debt is the total amount of liabilities categorized as "debt" on the balance sheet. It includes both current and long-term (non-current) debt.
Total Debt = Current Debt + Long-Term Debt
42.42B
Net Cash Net Cash / Debt
Net Cash / Debt is an indicator of the financial position of a company. It is calculated by taking the total amount of cash and cash equivalents and subtracting the total debt.
Net Cash / Debt = Total Cash - Total Debt
2.17B
Book Value Shareholders' Equity
Shareholders’ equity is also called book value or net worth. It can be seen as the amount of money held by investors inside the company. It is calculated by subtracting all liabilities from all assets.
Shareholders' Equity = Total Assets - Total Liabilities
86.04B
Book Value Per Share (ttm) Book Value Per Share
Book value per share is the total amount of book value attributable to each individual stock. It is calculated by dividing book value (shareholders' equity) by the number of outstanding shares.
Book Value Per Share = Book Value / Shares Outstanding
25.46
Working Capital (ttm) Working Capital
Working capital is the amount of money available to a business to conduct its day-to-day operations. It is calculated by subtracting total current liabilities from total current assets.
Working Capital = Current Assets - Current Liabilities
11.89B

Cash Flow

In the last 12 months, operating cash flow of the company was 45.54B and capital expenditures -3.53B, giving a free cash flow of 42.02B.
Operating Cash Flow (ttm) Operating Cash Flow
Operating cash flow, also called cash flow from operating activities, measures the amount of cash that a company generates from normal business activities. It is the amount of cash left after all cash income has been received, and all cash expenses have been paid.
45.54B
Capital Expenditures (ttm) Capital Expenditures
Capital expenditures are also called payments for property, plants and equipment. It measures cash spent on long-term assets that will be used to run the business, such as manufacturing equipment, real estate and others.
-3.53B
Free Cash Flow (ttm) Free Cash Flow
Free cash flow is the cash remaining after the company spends on everything required to maintain and grow the business. It is calculated by subtracting capital expenditures from operating cash flow.
Free Cash Flow = Operating Cash Flow - Capital Expenditures
42.02B
FCF Per Share (ttm) Free Cash Flow Per Share
Free cash flow per share is the amount of free cash flow attributed to each outstanding stock.
FCF Per Share = Free Cash Flow / Shares Outstanding
12.61

Telefonaktiebolaget LM Ericsson (publ) News

Apr 17, 2025 - zacks.com
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Ericsson (ERIC) is well positioned to outperform the market, as it exhibits above-average growth in financials....[read more]
Apr 16, 2025 - zacks.com
All You Need to Know About Ericsson (ERIC) Rating Upgrade to Buy
Ericsson (ERIC) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy)....[read more]
Apr 16, 2025 - zacks.com
How Ericsson Stock Stands Out in a Strong Industry
ERIC has seen solid earnings estimate revision activity over the past month, and belongs to a strong industry as well....[read more]
Apr 16, 2025 - zacks.com
BCE's Bell Canada & ERIC Spearhead First AI-Native Link Adaptation Test
BCE's unit, Bell Canada, and Ericsson's tie-up marks a significant advancement in using AI to boost the efficiency and performance of radio access networks....[read more]
Apr 15, 2025 - seekingalpha.com
Telefonaktiebolaget LM Ericsson (ERIC) Q1 2025 Earnings Call Transcript
Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC ) Q1 2025 Earnings Conference Call April 15, 2025 3:00 AM ET Company Participants Daniel Morris - Head, IR Borje Ekholm - President, Head, Segment Enterprise & Director Lars Sandstrom - SVP, Head, Group Function Finance & CFO Conference Call Participants Francois Bouvignies - UBS Andreas Joelsson - Carnegie Andrew Gardiner - Citi Joachim Gunell - DNB Sandeep Deshpande - JPMorgan Sébastien Sztabowicz - Kepler Cheuvreux Fredrik Lithell - Handelsbanken R...[read more]
Apr 15, 2025 - seekingalpha.com
Ericsson Jumps On Attractive Results, And Shares Deserve To Rise Further
Ericsson shares rose 8.3% on April 15th due to better-than-expected Q1 2025 financial results, including revenue and EPS and a special dividend announcement. Despite historical volatility from the 5G rollout and macroeconomic factors, Ericsson consistently generates attractive cash flow and is trading at appealing levels, warranting a soft "buy" rating for ERIC shares. Ericsson's diverse global operations, especially in North America and its Networks segment, are key revenue drivers with signifi...[read more]
Apr 15, 2025 - zacks.com
Ericsson Q1 Earnings Beat Estimates on Higher Revenues
ERIC reports mixed first-quarter 2025 results, driven by solid demand in the Networks Segment along with multiple deal wins....[read more]
Apr 15, 2025 - marketwatch.com
Ericsson's stock is climbing after strong results. Thank tariff stockpiling.
While some Americans are stockpiling beans, flour and olive oil in anticipation of tariffs, companies are also bulking up on what they need, and Ericsson appears to have benefited from that trend in the first quarter of 2025....[read more]
Apr 15, 2025 - wsj.com
Ericsson Posts Rise in North American Network Spending Ahead of Tariffs
The company's network business posted a 6% rise in sales, with strong growth in North America as customers moved forward investments ahead of planned U.S. import tariffs....[read more]
Apr 15, 2025 - prnewswire.com
Ericsson reports first quarter results 2025
STOCKHOLM , April 15, 2025 /PRNewswire/ -- Strategic highlights – solid momentum in technology leadership and programmable networks   Extending technology leadership with expanded high-performing and energy-efficient product portfolio.   First high-performing programmable networks partnership for Asia Pacific with Telstra announced....[read more]

Telefonaktiebolaget LM Ericsson (publ) Details

Country SE
City Stockholm
Address Torshamnsgatan 21
Ticker Symbol ERIC
Exchange NASDAQ Global Select
IPO Date Aug 24, 1981
CEO Mr. Anthony F. Bartolo
Sector Technology
Industry Communication Equipment
Employees 92.87K

Telefonaktiebolaget LM Ericsson (publ) 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.

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