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Ericsson (ERIC) Gains But Lags Market: What You Should Know

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Ericsson (ERIC - Free Report) closed the most recent trading day at $10.89, moving +0.09% from the previous trading session. This change lagged the S&P 500's 0.83% gain on the day. At the same time, the Dow added 1.2%, and the tech-heavy Nasdaq gained 0.74%.

Heading into today, shares of the telecommunications equipment provider had lost 5.56% over the past month, lagging the Computer and Technology sector's loss of 5.53% and the S&P 500's loss of 4.83% in that time.

Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. The company is expected to report EPS of $0.17, up 189.47% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.52 billion, up 9.41% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.56 per share and revenue of $25.20 billion, which would represent changes of +409.09% and +5%, respectively, from the prior year.

Any recent changes to analyst estimates for ERIC should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.44% lower. ERIC is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, ERIC is holding a Forward P/E ratio of 19.34. This valuation marks a discount compared to its industry's average Forward P/E of 20.24.

Meanwhile, ERIC's PEG ratio is currently 0.74. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Wireless Equipment stocks are, on average, holding a PEG ratio of 1.77 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 207, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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