Telefonaktiebolaget LM Ericsson (publ) (ERIC)
Technology · NMS · US
Fundamentals
Valuation and ratings
Telefonaktiebolaget LM Ericsson (publ) trades at USD9.89, which is 161% below the USD25.78 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 65 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 14.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Telefonaktiebolaget LM Ericsson (publ)
Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions to communications service providers, enterprises, and the public sector in the Americas, Europe, the Middle East, Africa, Northeast Asia, Southeast Asia, Oceania, and India. It operates through Networks; Cloud Software and Services; Enterprise; and Other segments. The Networks segment offers hardware, software, and service offerings for intelligent, reliable and flexible 5G networks. This segment also provides energy-efficient RAN with an AI-native software architecture deployable on Ericsson silicon and third-party CPUs/GPUs; transport networks; and active/ passive antennas, as well as deployment and lifecycle management services. The Cloud Software and Services segment provides core networks, network management, business and operations support systems, and network operations delivered as managed services, including secure data and voice connectivity, service monetization and orchestration tools, and network management services. The Enterprise segment offers intelligent networking and advanced communications software solutions comprising global communications platform, wireless wide area networks (WWAN), and private 5G networks. The Other segment includes RedBee Media that prepares and distributes live and on-demand video services for broadcasters, sports leagues, and communications service providers. The company has a strategic collaboration with T-Mobile US, Inc for the development of AI-native Scheduler with Link Adaptation software. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
ERIC passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
9 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$154.47M · 0.1% of book
- Renaissance Technologies, RENAISSANCE TECHNOLOGIES LLC$102.32M · 0.2% of book
- Marshall Wace, MARSHALL WACE, LLP$14.56M · 0.0% of book
- Ken Griffin, CITADEL ADVISORS LLC$12.06M · 0.0% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$11.56M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Telefonaktiebolaget LM Ericsson (publ) (ERIC) undervalued?
Against our discounted cash flow estimate of USD25.78, ERIC at USD9.89 is 161% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own ERIC?
9 of the institutions we track reported a position in ERIC in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is ERIC's P/E ratio?
ERIC trades at 14.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ERIC, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.