Telefonaktiebolaget LM Ericsson (ERIC B) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Telefonaktiebolaget LM Ericsson

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Why is Telefonaktiebolaget LM Ericsson ?

High Management Efficiency with a high ROE of 18.77%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 16.03

With a growth in Operating Profit of 51.72%, the company declared Very Positive results in Jun 25

The company has declared positive results for the last 3 consecutive quarters
OPERATING CASH FLOW(Y) Highest at SEK 40,418 MM
ROCE(HY) Highest at 20.29%
PRE-TAX PROFIT(Q) At SEK 7,048 MM has Grown at 150.02%

With ROE of 26.43%, it has a fair valuation with a 2.98 Price to Book Value

The stock is trading at a fair value compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -0.26%, its profits have risen by 63.3% ; the PEG ratio of the company is 0.2

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to Telefonaktiebolaget LM Ericsson should be less than 10%
Overall Portfolio exposure to Telecom - Equipment & Accessories should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Telecom - Equipment & Accessories)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Telefonaktiebolaget LM Ericsson for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

Telefonaktiebolaget LM Ericsson

-0.26%

28.51

33.00%

OMX Stockholm 30

8.01%

0.44

18.11%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

0.95%

EBIT Growth (5y)

5.28%

EBIT to Interest (avg)

16.03

Debt to EBITDA (avg)

Net Debt is too low

Net Debt to Equity (avg)

-0.14

Sales to Capital Employed (avg)

1.84

Tax Ratio

56.31%

Dividend Payout Ratio

47,500.00%

Pledged Shares

Institutional Holding

0.47%

ROCE (avg)

33.33%

ROE (avg)

18.77%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.98

EV to EBIT

9.54

EV to EBITDA

7.55

EV to Capital Employed

3.26

EV to Sales

1.22

PEG Ratio

0.18

Dividend Yield

2.87%

ROCE (Latest)

34.22%

ROE (Latest)

26.43%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Mildly Bearish

No Trend

OBV

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

10What is working for the Company

OPERATING CASH FLOW(Y)

Highest at SEK 40,418 MM

ROCE(HY)

Highest at 20.29%

PRE-TAX PROFIT(Q)

At SEK 7,048 MM has Grown at 150.02%

RAW MATERIAL COST(Y)

Fallen by -9.6% (YoY

INVENTORY TURNOVER RATIO(HY)

Highest at 4.48%

DEBTORS TURNOVER RATIO(HY)

Highest at 3.61%

-3What is not working for the Company

INTEREST(Q)

At SEK 927 MM has Grown at 15.16%

DIVIDEND PER SHARE(HY)

Lowest at SEK 3.61

Here's what is working for Telefonaktiebolaget LM Ericsson

Operating Cash Flow

Highest at SEK 40,418 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (SEK MM)

Pre-Tax Profit

At SEK 7,048 MM has Grown at 150.02%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (SEK MM)

Inventory Turnover Ratio

Highest at 4.48%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Debtors Turnover Ratio

Highest at 3.61%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Raw Material Cost

Fallen by -9.6% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Telefonaktiebolaget LM Ericsson

Interest

At SEK 927 MM has Grown at 15.16%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (SEK MM)

Dividend per share

Lowest at SEK 3.61

in the last five years

MOJO Watch

Company is distributing lower dividend than previous years

DPS (SEK)

Non Operating Income

Highest at SEK 0.16 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income