Fact based stock research
Ericsson (OM:ERIC B)

SE0000108656

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Ericsson stock research in summary

ericsson.com


ANALYSIS: With an Obermatt Combined Rank of 64 (better than 64% compared with investment alternatives), Ericsson (Communications Equipment, Sweden) shares have above-average financial characteristics compared with similar stocks. Shares of Ericsson are a good value (attractively priced) with a consolidated Value Rank of 90 (better than 90% of alternatives) but show below-average growth (Growth Rank of 46), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more


RECOMMENDATION: A Combined Rank of 64, is a buy recommendation based on Ericsson's financial characteristics. As the company Ericsson's key financial metrics exhibit good value (Obermatt Value Rank of 90) but low growth (Obermatt Growth Rank of 46) and risky financing practices (Obermatt Safety Rank of 23), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 90% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more


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Country Sweden
Industry Communications Equipment
Index Dividends Europe, Employee Focus EU, Renewables Users, Recycling, NASDAQ, OMX 30
Size class XX-Large

This stock has achievements: Top 10 Stock.

14-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Ericsson

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 14-Mar-2024. Financial reporting date used for calculating ranks: 30-Sep-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Ericsson is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 64 (better than 64% compared with investment alternatives), Ericsson (Communications Equipment, Sweden) shares have above-average financial characteristics compared with similar stocks. Shares of Ericsson are a good value (attractively priced) with a consolidated Value Rank of 90 (better than 90% of alternatives) but show below-average growth (Growth Rank of 46), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 64, is a buy recommendation based on Ericsson's financial characteristics. As the company Ericsson's key financial metrics exhibit good value (Obermatt Value Rank of 90) but low growth (Obermatt Growth Rank of 46) and risky financing practices (Obermatt Safety Rank of 23), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 90% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 14-Mar-2024. Stock analysis on combined financial performance: The higher the rank of Ericsson the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 90 (better than 90% compared with alternatives) for 2024, Ericsson shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Ericsson. Price-to-Sales is 69 which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value for Ericsson's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 81% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 51. Compared with other companies in the same industry, dividend yields of Ericsson are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 90, is a buy recommendation based on Ericsson's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Ericsson based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more


VALUE METRICS 2021 2022 2023 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 14-Mar-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Ericsson; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 46 (better than 46% compared with alternatives), Ericsson shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ericsson. Profit Growth has a rank of 59, which means that currently professionals expect the company to grow its profits more than 59% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 72 (above 72% of alternative investments). But Sales Growth has a below the median rank of 14, which means that, currently, professionals expect the company to grow less than 86% of its competitors, and Capital Growth also has a lower rank of 48. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 46, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Ericsson. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 14-Mar-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Ericsson.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company Ericsson has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Ericsson is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Ericsson. Liquidity is at 45, meaning that the company generates less profit to service its debt than 55% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 34, meaning the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. Finally, Refinancing is at a rank of 37 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), Ericsson has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Ericsson because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS 2021 2022 2023 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 14-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Ericsson and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 14-Mar-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Ericsson.
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Stock analysis by the purely fact based Obermatt Method for Ericsson from March 14, 2024.

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