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Telefonaktiebolaget LM Ericsson

Nasdaq:ERIC
Snowflake Description

Adequate balance sheet with moderate growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
ERIC
Nasdaq
SEK288B
Market Cap
  1. Home
  2. US
  3. Tech
Company description

Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers. The last earnings update was 24 days ago. More info.


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ERIC Share Price and Events
7 Day Returns
2.4%
NasdaqGS:ERIC
4.7%
US Communications
0.9%
US Market
1 Year Returns
0.4%
NasdaqGS:ERIC
1.1%
US Communications
10.5%
US Market
ERIC Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Telefonaktiebolaget LM Ericsson (ERIC) 2.4% 7.2% 5.1% 0.4% 79.6% -24.8%
US Communications 4.7% 5.9% -3.8% 1.1% 42.8% 65.8%
US Market 0.9% 5.2% 5.4% 10.5% 40.1% 45%
1 Year Return vs Industry and Market
  • ERIC matched the Communications industry (1.1%) over the past year.
  • ERIC underperformed the Market in United States of America which returned 10.5% over the past year.
Price Volatility
ERIC
Industry
5yr Volatility vs Market
Related Companies

Value

 Is Telefonaktiebolaget LM Ericsson undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Telefonaktiebolaget LM Ericsson to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Telefonaktiebolaget LM Ericsson.

NasdaqGS:ERIC Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 24 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 9.8%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:ERIC
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Communications Unlevered Beta Simply Wall St/ S&P Global 1.13
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.131 (1 + (1- 22%) (16.96%))
1.188
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.19
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.188 * 5.96%)
9.81%

Discounted Cash Flow Calculation for NasdaqGS:ERIC using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Telefonaktiebolaget LM Ericsson is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

NasdaqGS:ERIC DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (SEK, Millions) Source Present Value
Discounted (@ 9.81%)
2020 16,775.83 Analyst x12 15,276.93
2021 20,478.66 Analyst x7 16,982.67
2022 28,326.00 Analyst x2 21,391.52
2023 23,792.00 Analyst x1 16,362.12
2024 21,319.39 Est @ -10.39% 13,351.67
2025 19,943.04 Est @ -6.46% 11,373.77
2026 19,205.14 Est @ -3.7% 9,974.30
2027 18,865.00 Est @ -1.77% 8,922.24
2028 18,785.63 Est @ -0.42% 8,090.87
2029 18,884.16 Est @ 0.52% 7,406.60
Present value of next 10 years cash flows SEK129,132.00
NasdaqGS:ERIC DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= SEK18,884.16 × (1 + 2.73%) ÷ (9.81% – 2.73%)
SEK273,948.60
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= SEK273,948.60 ÷ (1 + 9.81%)10
SEK107,446.06
NasdaqGS:ERIC Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= SEK129,132.00 + SEK107,446.06
SEK236,578.06
Equity Value per Share
(SEK)
= Total value / Shares Outstanding
= SEK236,578.06 / 3,308.68
SEK71.5
NasdaqGS:ERIC Discount to Share Price
Calculation Result
Non-primary Listing Adjustment Factor 1 share in NasdaqGS:ERIC represents 0.10386x of OM:ERIC B
(This could be a different class, a depositary receipt, a different currency, or all of these things.)
0.10386x
Value per Share
(Listing Adjusted, USD)
= Value per Share (SEK) x Listing Adjustment Factor
= SEK 71.50 x 0.10386
$7.43
Value per share (USD) From above. $7.43
Current discount Discount to share price of $9.05
= -1 x ($9.05 - $7.43) / $7.43
-21.9%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Telefonaktiebolaget LM Ericsson is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Telefonaktiebolaget LM Ericsson's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Telefonaktiebolaget LM Ericsson's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:ERIC PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-09-30) in SEK SEK-2.65
OM:ERIC B Share Price ** OM (2019-11-08) in SEK SEK87.14
United States of America Communications Industry PE Ratio Median Figure of 30 Publicly-Listed Communications Companies 24.34x
United States of America Market PE Ratio Median Figure of 2,915 Publicly-Listed Companies 18.21x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Telefonaktiebolaget LM Ericsson.

NasdaqGS:ERIC PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= OM:ERIC B Share Price ÷ EPS (both in SEK)

= 87.14 ÷ -2.65

-32.84x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Telefonaktiebolaget LM Ericsson is loss making, we can't compare its value to the US Communications industry average.
  • Telefonaktiebolaget LM Ericsson is loss making, we can't compare the value of its earnings to the United States of America market.
Price based on expected Growth
Does Telefonaktiebolaget LM Ericsson's expected growth come at a high price?
Raw Data
NasdaqGS:ERIC PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section -32.84x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 24 Analysts
38.7%per year
United States of America Communications Industry PEG Ratio Median Figure of 19 Publicly-Listed Communications Companies 1.44x
United States of America Market PEG Ratio Median Figure of 2,014 Publicly-Listed Companies 1.47x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to calculate PEG ratio for Telefonaktiebolaget LM Ericsson, we can't assess if its growth is good value.
Price based on value of assets
What value do investors place on Telefonaktiebolaget LM Ericsson's assets?
Raw Data
NasdaqGS:ERIC PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-09-30) in SEK SEK23.63
OM:ERIC B Share Price * OM (2019-11-08) in SEK SEK87.14
United States of America Communications Industry PB Ratio Median Figure of 61 Publicly-Listed Communications Companies 1.85x
United States of America Market PB Ratio Median Figure of 5,041 Publicly-Listed Companies 1.74x
NasdaqGS:ERIC PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= OM:ERIC B Share Price ÷ Book Value per Share (both in SEK)

= 87.14 ÷ 23.63

3.69x

* Primary Listing of Telefonaktiebolaget LM Ericsson.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Telefonaktiebolaget LM Ericsson is overvalued based on assets compared to the US Communications industry average.
X
Value checks
We assess Telefonaktiebolaget LM Ericsson's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Communications industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Communications industry average (and greater than 0)? (1 check)
  5. Telefonaktiebolaget LM Ericsson has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Telefonaktiebolaget LM Ericsson expected to perform in the next 1 to 3 years based on estimates from 24 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
38.7%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Telefonaktiebolaget LM Ericsson expected to grow at an attractive rate?
  • Telefonaktiebolaget LM Ericsson's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Telefonaktiebolaget LM Ericsson's earnings growth is expected to exceed the United States of America market average.
  • Telefonaktiebolaget LM Ericsson's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:ERIC Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:ERIC Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 24 Analysts 38.7%
NasdaqGS:ERIC Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 24 Analysts 3.2%
United States of America Communications Industry Earnings Growth Rate Market Cap Weighted Average 12%
United States of America Communications Industry Revenue Growth Rate Market Cap Weighted Average 3.8%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.2%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:ERIC Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 24 Analyst Estimates (S&P Global) See Below
All numbers in SEK Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:ERIC Future Estimates Data
Date (Data in SEK Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 254,812 28,956 23,050 3
2022-12-31 251,688 26,862 22,132 4
2021-12-31 243,104 28,983 19,232 19
2020-12-31 236,356 23,797 16,222 22
2019-12-31 226,955 14,353 3,434 24
2019-11-10
NasdaqGS:ERIC Past Financials Data
Date (Data in SEK Millions) Revenue Cash Flow Net Income *
2019-09-30 224,652 20,664 -8,760
2019-06-30 221,335 15,715 214
2019-03-31 216,333 13,534 -3,376
2018-12-31 210,838 9,342 -6,530
2018-09-30 204,910 16,214 -18,453
2018-06-30 200,513 14,156 -24,759
2018-03-31 200,986 12,715 -23,345
2017-12-31 205,378 9,601 -32,576
2017-09-30 212,712 17,854 -15,704
2017-06-30 214,375 15,555 -12,376
2017-03-31 218,202 14,841 -10,318
2016-12-31 220,316 14,010 833

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Telefonaktiebolaget LM Ericsson's earnings are expected to grow significantly at over 20% yearly.
  • Telefonaktiebolaget LM Ericsson's revenue is expected to grow by 3.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:ERIC Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 24 Analyst Estimates (S&P Global) See Below

All data from Telefonaktiebolaget LM Ericsson Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:ERIC Future Estimates Data
Date (Data in SEK Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31 6.96 7.65 6.34 3.00
2022-12-31 6.69 7.50 6.16 3.00
2021-12-31 5.96 6.73 5.48 8.00
2020-12-31 5.05 5.59 4.33 12.00
2019-12-31 0.65 1.12 0.24 11.00
2019-11-10
NasdaqGS:ERIC Past Financials Data
Date (Data in SEK Millions) EPS *
2019-09-30 -2.65
2019-06-30 0.06
2019-03-31 -1.02
2018-12-31 -1.98
2018-09-30 -5.61
2018-06-30 -7.54
2018-03-31 -7.12
2017-12-31 -9.94
2017-09-30 -4.80
2017-06-30 -3.78
2017-03-31 -3.16
2016-12-31 0.26

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Telefonaktiebolaget LM Ericsson is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Telefonaktiebolaget LM Ericsson's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Telefonaktiebolaget LM Ericsson has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Telefonaktiebolaget LM Ericsson performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Telefonaktiebolaget LM Ericsson's growth in the last year to its industry (Communications).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Telefonaktiebolaget LM Ericsson does not make a profit and their year on year earnings growth rate was negative over the past 5 years.
  • Unable to compare Telefonaktiebolaget LM Ericsson's 1-year earnings growth to the 5-year average as it is not currently profitable.
  • Unable to compare Telefonaktiebolaget LM Ericsson's 1-year growth to the US Communications industry average as it is not currently profitable.
Earnings and Revenue History
Telefonaktiebolaget LM Ericsson's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Telefonaktiebolaget LM Ericsson Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:ERIC Past Revenue, Cash Flow and Net Income Data
Date (Data in SEK Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-09-30 224,652.00 -8,760.00 24,087.00 38,031.00
2019-06-30 221,335.00 214.00 26,288.00 37,806.00
2019-03-31 216,333.00 -3,376.00 27,199.00 37,618.00
2018-12-31 210,838.00 -6,530.00 27,131.00 37,316.00
2018-09-30 204,910.00 -18,453.00 28,304.00 37,287.00
2018-06-30 200,513.00 -24,759.00 28,133.00 36,736.00
2018-03-31 200,986.00 -23,345.00 27,962.00 35,475.00
2017-12-31 205,378.00 -32,576.00 31,675.00 35,580.00
2017-09-30 212,712.00 -15,704.00 31,150.00 32,854.00
2017-06-30 214,375.00 -12,376.00 30,469.00 31,557.00
2017-03-31 218,202.00 -10,318.00 30,630.00 30,520.00
2016-12-31 220,316.00 833.00 27,513.00 28,892.00
2016-09-30 230,961.00 10,376.00 27,552.00 29,153.00
2016-06-30 239,046.00 13,689.00 27,817.00 29,820.00
2016-03-31 245,609.00 14,196.00 28,142.00 31,615.00
2015-12-31 246,920.00 13,549.00 28,521.00 32,823.00
2015-09-30 241,338.00 10,716.00 28,690.00 34,762.00
2015-06-30 239,820.00 10,282.00 28,358.00 35,958.00
2015-03-31 233,998.00 10,767.00 27,556.00 36,184.00
2014-12-31 227,983.00 11,568.00 26,927.00 36,004.00
2014-09-30 227,029.00 13,755.00 25,850.00 35,212.00
2014-06-30 222,367.00 14,030.00 25,592.00 33,669.00
2014-03-31 222,849.00 12,920.00 25,617.00 32,295.00
2013-12-31 227,376.00 12,005.00 25,248.00 31,364.00
2013-09-30 227,280.00 -867.00 25,149.00 31,155.00
2013-06-30 228,849.00 -1,611.00 25,141.00 30,949.00
2013-03-31 228,837.00 -1,970.00 25,379.00 31,309.00
2012-12-31 227,779.00 5,775.00 25,503.00 31,981.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • It is difficult to establish if Telefonaktiebolaget LM Ericsson has efficiently used shareholders’ funds last year (Return on Equity greater than 20%) as it is loss-making.
  • It is difficult to establish if Telefonaktiebolaget LM Ericsson has efficiently used its assets last year compared to the US Communications industry average (Return on Assets) as it is loss-making.
  • It is difficult to establish if Telefonaktiebolaget LM Ericsson improved its use of capital last year versus 3 years ago (Return on Capital Employed) as it is currently loss-making.
X
Past performance checks
We assess Telefonaktiebolaget LM Ericsson's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Communications industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Telefonaktiebolaget LM Ericsson has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Telefonaktiebolaget LM Ericsson's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Telefonaktiebolaget LM Ericsson's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Telefonaktiebolaget LM Ericsson is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Telefonaktiebolaget LM Ericsson's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Telefonaktiebolaget LM Ericsson's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 4.3x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Telefonaktiebolaget LM Ericsson Company Filings, last reported 1 month ago.

NasdaqGS:ERIC Past Debt and Equity Data
Date (Data in SEK Millions) Total Equity Total Debt Cash & Short Term Investments
2019-09-30 77,475.00 38,775.00 57,049.00
2019-06-30 84,533.00 35,200.00 51,865.00
2019-03-31 84,532.00 35,548.00 48,636.00
2018-12-31 87,770.00 33,420.00 45,014.00
2018-09-30 95,953.00 33,650.00 42,649.00
2018-06-30 93,560.00 33,773.00 45,353.00
2018-03-31 93,466.00 33,688.00 42,150.00
2017-12-31 97,571.00 33,282.00 42,597.00
2017-09-30 115,687.00 31,043.00 32,736.00
2017-06-30 123,755.00 30,330.00 32,200.00
2017-03-31 126,841.00 37,337.00 46,502.00
2016-12-31 135,257.00 26,686.00 50,291.00
2016-09-30 134,012.00 27,290.00 43,064.00
2016-06-30 136,691.00 27,817.00 48,777.00
2016-03-31 145,644.00 24,524.00 61,011.00
2015-12-31 147,366.00 25,881.00 66,270.00
2015-09-30 137,984.00 25,785.00 51,547.00
2015-06-30 136,725.00 25,750.00 53,769.00
2015-03-31 149,051.00 26,343.00 66,087.00
2014-12-31 145,309.00 26,198.00 72,159.00
2014-09-30 143,374.00 22,644.00 66,053.00
2014-06-30 137,958.00 23,029.00 68,398.00
2014-03-31 142,633.00 24,637.00 79,875.00
2013-12-31 141,623.00 30,611.00 77,089.00
2013-09-30 133,950.00 25,594.00 60,668.00
2013-06-30 133,866.00 26,489.00 64,814.00
2013-03-31 139,169.00 28,722.00 72,085.00
2012-12-31 138,483.00 30,372.00 76,708.00
  • Telefonaktiebolaget LM Ericsson's level of debt (50%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (15.8% vs 50% today).
CASH RUNWAY ANALYSIS

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

  • Whilst loss making Telefonaktiebolaget LM Ericsson has sufficient cash runway for more than 3 years if it maintains the current positive free cash flow level.
  • Whilst loss making Telefonaktiebolaget LM Ericsson has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -25.6% per year.
X
Financial health checks
We assess Telefonaktiebolaget LM Ericsson's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Telefonaktiebolaget LM Ericsson has a total score of 4/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Telefonaktiebolaget LM Ericsson's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.15%
Current annual income from Telefonaktiebolaget LM Ericsson dividends. Estimated to be 2.17% next year.
If you bought $2,000 of Telefonaktiebolaget LM Ericsson shares you are expected to receive $23 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Telefonaktiebolaget LM Ericsson's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.43%).
  • Telefonaktiebolaget LM Ericsson's dividend is below the markets top 25% of dividend payers in United States of America (3.66%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:ERIC Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 24 Analyst Estimates (S&P Global) See Below
United States of America Communications Industry Average Dividend Yield Market Cap Weighted Average of 15 Stocks 2.8%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1944 Stocks 2.4%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:ERIC Future Dividends Estimate Data
Date (Data in SEK) Dividend per Share (annual) Avg. No. Analysts
2023-12-31 3.65 3.00
2022-12-31 3.46 3.00
2021-12-31 2.13 15.00
2020-12-31 1.69 17.00
2019-12-31 1.29 17.00
2019-11-10
NasdaqGS:ERIC Past Annualized Dividends Data
Date (Data in SEK) Dividend per share (annual) Avg. Yield (%)
2019-02-20 1.000 1.166
2018-02-21 1.000 1.427
2017-03-28 1.000 1.862
2016-03-10 3.700 6.350
2015-03-06 3.400 3.922
2015-01-27 3.400 3.238
2014-04-11 3.000 3.463
2013-03-06 2.750 3.415
2012-01-25 2.500 3.891
2011-03-03 2.250 2.986
2010-01-25 2.000 2.595
2009-03-17 1.850 2.611

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have fallen over the past 10 years.
Current Payout to shareholders
What portion of Telefonaktiebolaget LM Ericsson's earnings are paid to the shareholders as a dividend.
  • The company is paying a dividend however it is incurring a loss.
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.2x coverage).
X
Income/ dividend checks
We assess Telefonaktiebolaget LM Ericsson's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Telefonaktiebolaget LM Ericsson afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Telefonaktiebolaget LM Ericsson has a total score of 1/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Telefonaktiebolaget LM Ericsson's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
E. Ekholm
COMPENSATION SEK737,547
AGE 56
TENURE AS CEO 2.8 years
CEO Bio

Mr. E. Börje Ekholm, MSc, MBA has been the Chief Executive Officer and President of Telefonaktiebolaget LM Ericsson (publ) since January 16, 2017. Mr. Ekholm served as the Chief Executive Officer/head of Patricia Industries AB from May 12, 2015 to January 2017. Mr. Ekholm has held a variety of management positions since joining Patricia Industries in 1992. He served as the Chief Executive Officer and President of Investor AB from September 1, 2005 to May 12, 2015. He served as a Member of the Management Group at Investor AB from 1997 to May 12, 2015 and was employed there since 1992. He served as the Head of New Investments at Investor Growth Capital. He served as the Head of New Investments from 1999 to 2005 and an Advisor on private equity investments since January 1998. He served as Deputy Chief Executive Officer at Logica AB. He was also associated with McKinsey & Company, Inc. and AB Electrolux (publ). He has served as an Analyst at Core Holdings and Investor AB. From January 1995 to December 1997, he served as the President at Novare Kapital and as its Chief Executive Officer from 1988 to 1992. He was a Manager of Hycliff LLC. Mr. Ekholm has been the Chairman at Logica AB since 2002. He serves as the Chairman of KTH Kungliga Tekniska Högskolan. He served as the Chairman at Nasdaq, Inc. from December 13, 2012 to December 31, 2016. He served as the Interim Chairman of Nasdaq, Inc. from May 25, 2012 to December 13, 2012. He served as the Chairman of the Board of Biotage AB; and at b-business partners. He served as Vice Chairman of Scania AB (publ) since 2007. He has been a Director of Telefonaktiebolaget LM Ericsson (publ) since April 2006. He served as a Director at AB Chalmersinvest. He has been an Independent Director at Alibaba Group Holding Limited since June 2015. He serves as a Director of Chalmers Innovation AB, Avlis and Avlis Invest. He served as an Independent Director at Trimble Inc. since 2015 until May 2, 2017. He served as a Director at Nasdaq, Inc. since February 17, 2011 until May 10, 2017. Mr. Ekholm served as a Director at Scania from 2007 to May 4, 2012; Greenway Medical Technologies, Inc. and Tessera, Inc., since May 1999. He served as a Director of Tessera Technologies Inc., (now Xperi Corporation) from May 1999 to May 18, 2006 and as its Lead Independent Director from April 2004 to May 18, 2006. He served as a Director at Investor AB from April 2006 to May 12, 2015. He served as a Director of Husqvarna AB (publ) from January 2006 to April 11, 2013. He served as a Director of Lindorff Group AB since February 17, 2011. He served as a Director of EQT Partners AB and WM-data. He is a Member of Board of directors/Trustees of Choate Rosemary Hall. Mr. Ekholm holds an M.B.A. degree from INSEAD, Fontainebleau, France and an M.Sc. in Electrical Engineering from Kungliga Tekniska Hogskolan, Sweden.

CEO Compensation
  • E.'s compensation has been consistent with company performance over the past year, both up more than 20%.
  • E.'s remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Telefonaktiebolaget LM Ericsson management team in years:

2.6
Average Tenure
55
Average Age
  • The tenure for the Telefonaktiebolaget LM Ericsson management team is about average.
Management Team

E. Ekholm

TITLE
President
COMPENSATION
SEK738K
AGE
56
TENURE
2.8 yrs

Carl Mellander

TITLE
Senior VP
AGE
55
TENURE
2.6 yrs

Eva-Britt Allenius

TITLE
Chief Accounting Officer

Erik Ekudden

TITLE
Group CTO & SVP and Head of Technology & Architecture
AGE
51
TENURE
2.3 yrs

Peter Nyquist

TITLE
VP & Head of Investor Relations
AGE
54
TENURE
6.2 yrs

Xavier Dedullen

TITLE
Senior VP
AGE
55
TENURE
1.6 yrs

Stella Medlicott

TITLE
SVP, Chief Marketing & Communications Officer and Head of Group Marketing & Corporate Relations
AGE
50
TENURE
0.4 yrs

MajBritt Arfert

TITLE
Senior VP
AGE
56
TENURE
3 yrs

Björn Boström

TITLE
Senior Vice President of Supply & Information Technology
AGE
72

Ola Rembe

TITLE
VP & Head of External Communications
Board of Directors Tenure

Average tenure and age of the Telefonaktiebolaget LM Ericsson board of directors in years:

2.7
Average Tenure
60
Average Age
  • The average tenure for the Telefonaktiebolaget LM Ericsson board of directors is less than 3 years, this suggests a new board.
Board of Directors

Ronnie Leten

TITLE
Chairman of the Board
COMPENSATION
SEK5M
AGE
63
TENURE
1.7 yrs

E. Ekholm

TITLE
President
COMPENSATION
SEK738K
AGE
56
TENURE
13.6 yrs

Jacob Wallenberg

TITLE
Deputy Chairman
COMPENSATION
SEK2M
AGE
63

Helena Stjernholm

TITLE
Deputy Chairman
COMPENSATION
SEK2M
AGE
49
TENURE
3.6 yrs

Kris Rinne

TITLE
Independent Director
COMPENSATION
SEK1M
AGE
65
TENURE
3.6 yrs

Jon Baksaas

TITLE
Independent Director
COMPENSATION
SEK1M
AGE
65
TENURE
2.7 yrs

Eric Elzvik

TITLE
Independent Director
COMPENSATION
SEK1M
AGE
59
TENURE
2.7 yrs

Kurt Jofs

TITLE
Independent Director
COMPENSATION
SEK1M
AGE
61
TENURE
1.7 yrs

Torbjorn Nyman

TITLE
Employee Representative Director
COMPENSATION
SEK32K
AGE
58
TENURE
1.7 yrs

Roger Svensson

TITLE
Employee Representative Director
COMPENSATION
SEK48K
AGE
48
TENURE
2.7 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
20. May 19 Sell Rafiah Ibrahim Individual 17. May 19 17. May 19 -457 $9.26 $-4,234
25. Apr 19 Buy Rafiah Ibrahim Individual 23. Apr 19 23. Apr 19 179 $10.03 $1,800
X
Management checks
We assess Telefonaktiebolaget LM Ericsson's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Telefonaktiebolaget LM Ericsson has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

What Does Telefonaktiebolaget LM Ericsson (publ)'s (NASDAQ:ERIC) Share Price Indicate?

Let’s take a look at Telefonaktiebolaget LM Ericsson’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. … This means that the opportunity to buy Telefonaktiebolaget LM Ericsson at a good price has disappeared! … In addition to this, it seems like Telefonaktiebolaget LM Ericsson’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value.

Simply Wall St -

Should You Buy Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC)?

The stock’s ratio of 1.56x is currently trading slightly below its industry peers’ ratio of 1.78x, which means if you buy Telefonaktiebolaget LM Ericsson today, you’d be paying a relatively fair price for it. … Furthermore, it seems like Telefonaktiebolaget LM Ericsson’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. … Telefonaktiebolaget LM Ericsson’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value.

Simply Wall St -

Telefonaktiebolaget LM Ericsson (publ) (ERIC): Financial Strength Analysis

See our latest analysis for ERIC Can ERIC service its debt comfortably? … NasdaqGS:ERIC Historical Debt Oct 20th 17 A basic way to evaluate ERIC's debt management is to see whether the cash flow generated from the business is at a relatively high level compared to the debt capital invested. … ERIC has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at an appropriate level.

Simply Wall St -

Company Info

Description

Telefonaktiebolaget LM Ericsson (publ) provides information and communications technology solutions for service providers. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment provides mobile radio access networks, transport solutions, and site solutions, as well as related services, such as network rollout, network tuning, and customer support. The Digital Services segment offers products and services for service providers in the areas of business support systems, operations support systems, cloud core, cloud communication, network functions virtualization, and cloud infrastructure, as well as consulting, learning, and testing services. The Managed Services segment provides vendor agnostic services, including networks and IT managed, application development and modernization, and network design and optimization services to manage service providers networks. The Emerging Business and Other segment consists of emerging businesses; iconectiv that offers software-based interconnection solutions; media solutions; and Red Bee Media, which consists of technology enabled services to manage the play-out platform for broadcasters and content owners. It operates in Europe and Latin America, the Middle East and Africa, North America, North East Asia, South East Asia, Oceania, and India. The company was founded in 1876 and is headquartered in Stockholm, Sweden.

Details
Name: Telefonaktiebolaget LM Ericsson (publ)
ERIC
Exchange: NasdaqGS
Founded: 1876
SEK29,679,629,515
3,308,683,486
Website: http://www.ericsson.com
Address: Telefonaktiebolaget LM Ericsson (publ)
Torshamnsgatan 21,
Kista,
Stockholm,
Stockholm County, 164 83,
Sweden
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
OM ERIC B Class B Shares OMX Nordic Exchange Stockholm SE SEK 20. Sep 1990
OTCPK ERIX.F Class B Shares Pink Sheets LLC US USD 20. Sep 1990
DB ERCB Class B Shares Deutsche Boerse AG DE EUR 20. Sep 1990
XTRA ERCB Class B Shares XETRA Trading Platform DE EUR 20. Sep 1990
LSE 0O87 Class B Shares London Stock Exchange GB SEK 20. Sep 1990
SWX ERICB Class B Shares SIX Swiss Exchange CH CHF 20. Sep 1990
HLSE ERIBR Class B Shares OMX Nordic Exchange Helsinki FI EUR 20. Sep 1990
BATS-CHIXE ERICBS Class B Shares BATS 'Chi-X Europe' GB SEK 20. Sep 1990
BATS-CHIXE ERIBRH Class B Shares BATS 'Chi-X Europe' GB EUR 20. Sep 1990
NasdaqGS ERIC ADR EACH REP 1 ORD'B'SEK1 Nasdaq Global Select US USD 14. Dec 1972
OM ERIC A Class A Shares OMX Nordic Exchange Stockholm SE SEK 02. Jan 1992
DB ERCA ADR EACH REP 1 ORD'B'SEK1 Deutsche Boerse AG DE EUR 14. Dec 1972
DB ERCG Class A Shares Deutsche Boerse AG DE EUR 02. Jan 1992
XTRA ERCG Class A Shares XETRA Trading Platform DE EUR 02. Jan 1992
XTRA ERCA ADR EACH REP 1 ORD'B'SEK1 XETRA Trading Platform DE EUR 14. Dec 1972
LSE 0O86 Class A Shares London Stock Exchange GB SEK 02. Jan 1992
BMV ERIC N ADR EACH REP 1 ORD'B'SEK1 Bolsa Mexicana de Valores MX MXN 14. Dec 1972
BATS-CHIXE ERICAS Class A Shares BATS 'Chi-X Europe' GB SEK 02. Jan 1992
Number of employees
Current staff
Staff numbers
95,887
Telefonaktiebolaget LM Ericsson employees.
Industry
Communications Equipment
Tech
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/11/10 23:35
End of day share price update: 2019/11/08 00:00
Last estimates confirmation: 2019/11/08
Last earnings filing: 2019/10/17
Last earnings reported: 2019/09/30
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.