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Ericsson (ERIC) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Ericsson (ERIC - Free Report) closed at $10.86, marking a -0.09% move from the previous day. This change lagged the S&P 500's 1.64% gain on the day. Meanwhile, the Dow gained 0.88%, and the Nasdaq, a tech-heavy index, added 2.56%.

Coming into today, shares of the telecommunications equipment provider had gained 0.18% in the past month. In that same time, the Computer and Technology sector gained 3.41%, while the S&P 500 gained 2.44%.

Investors will be hoping for strength from ERIC as it approaches its next earnings release, which is expected to be October 21, 2020. On that day, ERIC is projected to report earnings of $0.17 per share, which would represent year-over-year growth of 189.47%. 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 $25.28 billion, which would represent changes of +409.09% and +5.31%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ERIC. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.33% lower. ERIC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ERIC currently has a Forward P/E ratio of 19.5. Its industry sports an average Forward P/E of 19.89, so we one might conclude that ERIC is trading at a discount comparatively.

Investors should also note that ERIC has a PEG ratio of 0.74 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ERIC's industry had an average PEG ratio of 1.83 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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