Back to top

Image: Bigstock

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

Read MoreHide Full Article

Ericsson (ERIC - Free Report) closed at $12.47 in the latest trading session, marking a +0.81% move from the prior day. This change outpaced the S&P 500's 0.19% loss on the day. Elsewhere, the Dow lost 0.49%, while the tech-heavy Nasdaq added 0.45%.

Coming into today, shares of the telecommunications equipment provider had gained 2.91% in the past month. In that same time, the Computer and Technology sector gained 7.62%, while the S&P 500 gained 7.68%.

Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. This is expected to be January 29, 2021. The company is expected to report EPS of $0.21, up 40% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.42 billion, up 7.44% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.59 per share and revenue of $24.78 billion, which would represent changes of +436.36% and +3.24%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ERIC. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. ERIC is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note ERIC's current valuation metrics, including its Forward P/E ratio of 21.15. For comparison, its industry has an average Forward P/E of 22.75, which means ERIC is trading at a discount to the group.

We can also see that ERIC currently has a PEG ratio of 0.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Wireless Equipment was holding an average PEG ratio of 2.47 at yesterday's closing price.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 103, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Ericsson (ERIC) - free report >>

Published in