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Ericsson (ERIC) Stock Slides as Market Rises: Facts to Know Before You Trade

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Ericsson (ERIC - Free Report) closed the latest trading day at $5.08, indicating a -1.93% change from the previous session's end. The stock trailed the S&P 500, which registered a daily gain of 1.11%. At the same time, the Dow added 0.8%, and the tech-heavy Nasdaq gained 1.24%.

Heading into today, shares of the telecommunications equipment provider had lost 7.17% over the past month, lagging the Computer and Technology sector's gain of 0.85% and the S&P 500's gain of 0.48% in that time.

Investors will be eagerly watching for the performance of Ericsson in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on April 16, 2024. The company is expected to report EPS of $0.05, down 37.5% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $5.33 billion, indicating a 10.95% decrease compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $0.42 per share and revenue of $24.03 billion, which would represent changes of -2.33% and -3.24%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Ericsson. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. As of now, Ericsson holds a Zacks Rank of #3 (Hold).

Looking at its valuation, Ericsson is holding a Forward P/E ratio of 12.39. Its industry sports an average Forward P/E of 14.52, so one might conclude that Ericsson is trading at a discount comparatively.

The Wireless Equipment industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 195, positioning it in the bottom 23% 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.

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