QualityDipStocks / Technology · Communications equipment
Ericsson ERIC
Not in a dip by our rules: 19% below its 52-week high.
A quality company trading well below our fair value estimate.
- Fair value est.
- $14.76+32%
- Market Value
- —
- Off 52-wk high
- −19%
- Risk vs market
- Market-likebeta 1.01
5 bullish · 3 bearish See why
Key levels
Every level vs today’s $11.18
- 52-wk lowlowest close, 1 year$9.15−18.2%
- PriceFri Oct 30 close$11.18you are here
- 52-wk highhighest close, 1 year$13.74+22.9%
- Fair value est.base case$14.76+32.0%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.0% ±2 points. Bear = 10.5% and 1.0%; bull = 8.5% and 5.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
What the price implies To be worth today’s price, ERIC’s free cash flow would need to shrink about 2% a year for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much ERIC moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves about in line with the market, and its own price swings are 2.8× the S&P 500’s.
- Beta vs S&P 500
- 1.01
- Volatility
- 36% vs 13% SPY
- Correlation SPY
- 0.36
- Correlation QQQ
- 0.32
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $14.76, 32% above the price.
ProfitabilityOperating margin widened to 16.3% in FY2025 from −7.7% in FY2023 (SEC filings).
ValuationFree-cash-flow yield of 8.3% (price / FCF 12.0×): $3.1B of free cash in the last 12 months.
ValuationP/E of 12.8× vs a 33.9× median for the 138 Technology companies we cover.
Balance sheetNet cash of $4.1B: cash and short-term investments exceed debt (Dec 31, 2025).
Top bearish points 3 of 5
Cash returnsFree cash flow fell 31% over the last 12 months vs the 12 months before.
GrowthSales shrank 4% a year from FY2022 to FY2025.
GrowthSales fell 5% over the last 12 months vs the 12 months before (SEC filings).
Who’s talking about it
Notable investors, executives, analysts and public figures on Ericsson in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Communications equipment
All fundamentals
P/E 12.8 · FCF yield 8.3% · ROE 28%
Valuation
- P/E
- 12.8×Technology median 33.9×
- Price / FCF
- 12.0×
- FCF yield
- 8.3%
- EV / EBITDA
- 6.8×
- Price / sales
- 1.54×
- Price / book
- 3.32×
- Market cap
- $37.4Bprice × diluted shares
- Enterprise value
- $33.2B
Growth
- Revenue, 12 months
- $24.3B
- Sales growth, 12 months
- −4.5%vs the 12 months before
- Sales growth, 3 yrs
- −4.5%/yrfrom FY2022
- Diluted EPS, 12 months
- $8.51
- EPS growth, last FY
- n/an/m: EPS a year ago near zero
- Net income, 12 months
- $2.9B
- Net income growth
- n/an/m: earnings a year ago near zero
Profitability
- Gross margin
- 47.6%
- Operating margin
- 16.3%
- Net margin
- 12.0%
- FCF margin
- 12.8%
- Return on equity
- 28%
- Return on invested capital
- 42%
Balance sheet
- Cash & short-term inv.
- $4.5B
- Total debt
- $363M
- Net cash
- $4.1B
- Debt / equity
- 0.03×
- Interest coverage
- 12.7×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $3.1B
- FCF growth, 12 months
- −31%
- Dividend yield
- 2.62%$980M paid
- Payout ratio
- 34%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- n/ano quarterly diluted share count
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Dec 31, 2025; balance sheet at Dec 31, 2025. From Ericsson’s SEC filings, reported in SEK and converted to US dollars. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $14.76 · FCF value $207.77
Assumes 3.0% growth for 5 years (revenue grew -4.5% a year FY22–FY25; floored at 3%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $0.93 a share (fiscal year to Dec 31, 2025, converted from SEK at 0.1027), from the 20-F filed Mar 12, 2026. Net cash $789M, not added.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 69 · 5 days +4.9%
The business
FCF $27.9B · Sales +6%
- Free cash flow, 12 months$27.9B
- Free-cash-flow yield74.3%
- Free-cash-flow margin12%
- Gross margin47%
- Operating margin8%
- Return on invested capital10%
- Return on equity18%
- Sales growth (latest quarter vs year-ago quarter)+6%
- Net debt / EBITDA−0.2×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when ERIC fires a reversal signal
One text when a published rule fires on ERIC or any of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.