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

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In the latest trading session, Ericsson (ERIC - Free Report) closed at $9.32, marking a -0.21% move from the previous day. This move lagged the S&P 500's daily gain of 0.3%. Elsewhere, the Dow lost 0.38%, while the tech-heavy Nasdaq added 0.44%.

Heading into today, shares of the telecommunications equipment provider had gained 5.06% over the past month, outpacing the Computer and Technology sector's gain of 4.56% and the S&P 500's gain of 2.91% in that time.

Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. The company is expected to report EPS of $0.04, up 300% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.26 billion, down 1.72% from the year-ago period.

ERIC's full-year Zacks Consensus Estimates are calling for earnings of $0.30 per share and revenue of $23.40 billion. These results would represent year-over-year changes of +900% and -4.77%, respectively.

It is also important to note the recent changes to analyst estimates for ERIC. These revisions help to show the ever-changing nature of near-term business trends. 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. 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 has moved 16.08% lower within the past month. ERIC is currently a Zacks Rank #5 (Strong Sell).

Valuation is also important, so investors should note that ERIC has a Forward P/E ratio of 31.13 right now. This represents a premium compared to its industry's average Forward P/E of 23.14.

Meanwhile, ERIC's PEG ratio is currently 0.75. 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. The Wireless Equipment was holding an average PEG ratio of 2.19 at yesterday's closing price.

The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 87, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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