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

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Ericsson (ERIC - Free Report) closed at $12.68 in the latest trading session, marking a +0.48% move from the prior day. This change outpaced the S&P 500's 0.23% gain on the day.

Prior to today's trading, shares of the telecommunications equipment provider had lost 6.03% over the past month. This has lagged the Computer and Technology sector's gain of 5.66% and the S&P 500's gain of 2.34% in that time.

Investors will be hoping for strength from ERIC as it approaches its next earnings release, which is expected to be July 16, 2021. On that day, ERIC is projected to report earnings of $0.14 per share, which would represent year-over-year growth of 40%. Meanwhile, our latest consensus estimate is calling for revenue of $6.65 billion, up 15.83% from the prior-year quarter.

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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ERIC is currently a Zacks Rank #3 (Hold).

Investors should also note ERIC's current valuation metrics, including its Forward P/E ratio of 16.28. This valuation marks a discount compared to its industry's average Forward P/E of 18.54.

We can also see that ERIC currently has a PEG ratio of 1.82. 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. The Wireless Equipment industry currently had an average PEG ratio of 2.72 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 230, putting it in the bottom 10% 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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