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Ericsson (ERIC) Declines More Than Market: Some Information for Investors

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The latest trading session saw Ericsson (ERIC - Free Report) ending at $4.94, denoting a -0.6% adjustment from its last day's close. This change lagged the S&P 500's 0.2% loss on the day. At the same time, the Dow lost 0.16%, and the tech-heavy Nasdaq lost 0.07%.

Shares of the telecommunications equipment provider witnessed a gain of 13.99% over the previous month, beating the performance of the Computer and Technology sector with its gain of 8.27% and the S&P 500's gain of 7.49%.

Analysts and investors alike will be keeping a close eye on the performance of Ericsson in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.14, marking a 30% fall compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $7.06 billion, down 12.04% from the prior-year quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.15 per share and revenue of $24.96 billion. These totals would mark changes of -75.41% and -6.64%, respectively, from last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Ericsson. Such recent modifications usually signify the changing landscape of near-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. 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 has shifted 1.33% upward. Currently, Ericsson is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, Ericsson is at present trading with a Forward P/E ratio of 32.7. This expresses a premium compared to the average Forward P/E of 14.09 of its industry.

Meanwhile, ERIC's PEG ratio is currently 16.03. 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. By the end of yesterday's trading, the Wireless Equipment industry had an average PEG ratio of 1.2.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 73, putting it in the top 29% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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