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

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Ericsson (ERIC - Free Report) closed at $11.95 in the latest trading session, marking a +1.1% move from the prior day. This change outpaced the S&P 500's 0.03% gain on the day.

Coming into today, shares of the telecommunications equipment provider had gained 1.2% in the past month. In that same time, the Computer and Technology sector gained 4.78%, while the S&P 500 gained 3.02%.

ERIC will be looking to display strength as it nears its next earnings release. On that day, ERIC is projected to report earnings of $0.19 per share, which would represent a year-over-year decline of 5%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.89 billion, up 6.33% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.72 per share and revenue of $27.54 billion, which would represent changes of +12.5% and +8.2%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ERIC. 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ERIC is holding a Zacks Rank of #4 (Sell) right now.

Investors should also note ERIC's current valuation metrics, including its Forward P/E ratio of 16.53. Its industry sports an average Forward P/E of 22.53, so we one might conclude that ERIC is trading at a discount comparatively.

Investors should also note that ERIC has a PEG ratio of 9.9 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 3.31 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 75, putting it in the top 30% 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.

To follow ERIC in the coming trading sessions, be sure to utilize Zacks.com.


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