Rankings Tech hardware & optics Ericsson
Ericsson
63
15070100
A view of the same findings, not a new score. How it works
A good business with a real question mark: the price, a crack, or both.
Biggest deductions
- The Iraq case, DOJ and FCPA−6
- Quality of growth−5
- Capital allocation−4
Strengths
- Net cash+3
- Buybacks+2
- Margin improvement+2
How the score is built
From 100 to 63, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 3 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 107.75 SEK
- Median analyst target
- 101.00 SEK
- Upside to median
- −6.3%
- Analysts
- 20
- Target range
- 73.00 – 135.00 SEK
- 52-week change
- +14%
- P/E (trailing)
- 18.5
- Forward P/E
- 17.4
- PEG
- n/a
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 4 findings−13 of −30
- −5Quality of growthRevenue has fallen four years in a row: from SEK 271.5bn in 2022 to 236.7bn in 2025 and 227.5bn TTM (−16%), and analysts expect −4.5% in 2026. Organic −1% in Q2 2026, and the Americas fell again.
- −4Capital allocationVonage was bought for about USD 6.2bn in 2022, and half of the goodwill and intangibles (SEK 32bn) was written down as early as 2023. The Enterprise segment has shrunk from SEK 25.7bn to 18.3bn (TTM), partly after the sale of iconectiv.
- −2MarginAdjusted EBITA margin 13.1% in Q2 (13.2% a year earlier) and operating margin 13.6% TTM. The gross margin has been lifted to 48%, but most of the improvement is cost cutting: headcount has fallen from 91,937 to 86,536 in a year.
- −2MoatEffectively a duopoly with Nokia outside China, but Huawei is bigger globally, and operators are holding mobile investment down; Ericsson has not been able to grow despite market share gains such as the AT&T contract.
Price
Today's multiples against the company's own history and its peers. · 2 findings−5 of −35
- −4Multiples vs own historyForward P/E 15.9 vs 8.6–17.8 in 2021–2025 (median about 14.5); EV/EBITDA 7.8 vs 5.7–10.3; P/B 2.9 vs 1.5–3.2. The upper half of the range for a company with falling revenue, and EPS is expected to fall 27% in 2026 (SEK 6.58 vs 9.03).
- −1FCF yieldFCF yield 10.3% on TTM figures, but analysts expect FCF of SEK 22.8bn in 2026 (about 7.5% of the SEK 304bn market value), and FCF before M&A was only SEK 0.4bn in Q2 vs 2.6bn a year earlier.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 4 findings−13 of −35
- −6The Iraq case, DOJ and FCPAEricsson pleaded guilty in 2023 and paid USD 206m for breaching the 2019 FCPA settlement (on top of USD 520m). The DOJ is still investigating the Iraq matters with unknown scope and duration, and four civil suits under the Anti-Terrorism Act (2022, 2024, 2025, 2026) naming Börje Ekholm as co-defendant await rulings on dismissal.
- −45G cycleMorgan Stanley downgraded to Underweight on 22 Sept 2026: the RAN market is expected flat into 2027, Networks revenue in North America fell about 5% in Q2 after the AT&T win, and the margin is expected to turn down. 8 of 20 analysts rate it sell.
- −2Component costsManagement expects pressure on the Networks gross margin in Q3 because of more roll-out projects and rising component prices, to be offset with price increases and internal measures.
- −1Management changeBörje Ekholm steps down on 30 Sept 2026 after nine years; Per Narvinger (head of Networks) takes over on 1 Oct in the middle of a weak RAN cycle.
Plus
Only documented strengths. · 3 findings+7 of +15
- +3Net cashNet cash of SEK 59.8bn on Ericsson's own definition (about 20% of market value) and net debt/EBITDA of −0.4.
- +2BuybacksA buyback programme of up to SEK 15bn (April 2026–March 2027). Dividends (9.7bn) and buybacks (3.1bn) TTM are clearly below FCF of SEK 31.2bn.
- +2Margin improvementThe gross margin has risen from 39.6% in 2023 to 48.1% in 2025 and 48.4% adjusted in Q2 2026, and ROIC is 27.6% vs a WACC of 6.6%.
Caveats
What the score does not capture, or where the data is weak.
The B share (ERIC.B). stockanalysis shows net cash of SEK 14.6bn, but Ericsson's own definition (including interest-bearing securities) gives SEK 59.8bn; that is used here. The trailing P/E (12.5) is lifted by the gain on the sale of iconectiv in 2025, so forward figures are used in T2. Q3 report comes 15 Oct. 2026, and a new CEO takes over on 1 Oct. Customer concentration (AT&T and others) has not been examined further.
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