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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 $13.16, moving +0.08% from the previous trading session. This move lagged the S&P 500's daily gain of 0.15%.

Coming into today, shares of the telecommunications equipment provider had lost 2.3% in the past month. In that same time, the Computer and Technology sector lost 0.49%, while the S&P 500 gained 0.58%.

ERIC will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.14, up 40% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.65 billion, up 15.83% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.78 per share and revenue of $28.53 billion. These totals would mark changes of +21.88% and +12.07%, respectively, from last 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 has moved 1.64% higher within the past month. ERIC currently has a Zacks Rank of #3 (Hold).

Digging into valuation, ERIC currently has a Forward P/E ratio of 16.97. For comparison, its industry has an average Forward P/E of 20.48, which means ERIC is trading at a discount to the group.

Also, we should mention that ERIC has a PEG ratio of 1.89. 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. ERIC's industry had an average PEG ratio of 2.24 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 132, putting it in the bottom 49% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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