Upside case
Bull case
$24+103.6%
ERIC would need investors to value it at roughly 4x earnings — about 2x more generous than today's 2x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Telefonaktiebolaget LM Ericsson (publ) (ERIC) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
40
analysts
15 bullish · 2 bearish · 40 covering ERIC
Strong Buy
0
Buy
15
Hold
23
Sell
2
Strong Sell
0
Consensus Target
$7
-41.8% vs today
Scenario Range
— – $24
Model bear to bull value window
Coverage
40
Published analyst ratings
Valuation Context
2.0x
Forward P/E · Market cap $36.6B
ERIC price targets
Three scenarios for where ERIC stock could go
Current
~$12
Confidence
47 / 100
Updated
May 1, 2026
Where we are now
Current · $12
Base
$75
Bull
$24
Market caseClosest to today
Base case
$75+528.7%
At 13x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Telefonaktiebolaget LM Ericsson (publ)
ERIC · NASDAQTechnologyCommunication EquipmentDecember year-end
Ericsson is a global telecommunications equipment and services company that provides network infrastructure, software, and managed services to telecom operators worldwide. It generates revenue primarily through its Networks segment (~65% of sales) selling radio access hardware and software, supplemented by Digital Services (~20%) for core network software and Managed Services (~15%) for network operations. The company's competitive advantage lies in its deep R&D expertise in 5G technology, long-standing relationships with major telecom operators, and comprehensive end-to-end network solutions.
Market Cap
$36.6B
Revenue TTM
$230.0B
Net Income TTM
$27.7B
Net Margin
12.1%
ERIC Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
80%Exceptional
12 quarters tracked
Revenue Beat Rate
20%Exceptional
vs consensus estimates
Avg EPS Surprise
+19.1%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q4 2025
Q1 2026
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q4 2025
EPS
$0.16/$0.13
Revenue
$5.9B/$7.1B
Q1 2026
EPS
$0.27/$0.23
Revenue
$7.7B/$7.2B
Q1 2026
EPS
$0.27/—
Revenue
$7.3B/—
Q2 2026
EPS
$0.13/$0.11
Revenue
$5.4B/$5.5B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q4 2025 | $0.16/$0.13 | +23.1% | $5.9B/$7.1B | -17.4% |
| Q1 2026 | $0.27/$0.23 | +17.4% | $7.7B/$7.2B | +7.1% |
| Q1 2026 | $0.27/— | — | $7.3B/— | — |
| Q2 2026 | $0.13/$0.11 | +18.2% | $5.4B/$5.5B | -1.3% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$214.1B
-6.9% YoY
FY2
$198.5B
-7.3% YoY
EPS Outlook
FY1
$6.38
-23.1% YoY
FY2
$5.41
-15.3% YoY
Trailing FCF (TTM)$29.1B
FCF Margin: 12.6%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
ERIC beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
ERIC Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $236.7B
Product Mix
Latest annual revenue by segment or product family
Services
39.3%
-4.9% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
North America
50.3%
+14.5% YoY
Tap, hover, or focus a slice to inspect segment detail.
Services is the largest disclosed segment at 39.3% of FY 2025 revenue, down 4.9% YoY.
North America is the largest reported region at 50.3%, up 14.5% YoY.
ERIC Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $383 — implies +3154.0% from today's price.
Upside to Fair Value
3154.0%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
ERIC
13.7x
vs
S&P 500
25.1x
45% discount
vs Technology Trailing P/E
ERIC
13.7x
vs
Technology
26.7x
49% discount
vs ERIC 5Y Avg P/E
Today
13.7x
vs
5Y Average
1.3x
+998% premium
Forward PE
2.0x
S&P 500
19.1x
-89%
Technology
22.1x
-91%
5Y Avg
—
—
Trailing PE
13.7x
S&P 500
25.1x
-45%
Technology
26.7x
-49%
5Y Avg
1.3x
+998%
PEG Ratio
1.21x
S&P 500
1.72x
-29%
Technology
1.52x
-20%
5Y Avg
—
—
EV/EBITDA
9.0x
S&P 500
15.2x
-41%
Technology
17.5x
-49%
5Y Avg
1.0x
+798%
Price/FCF
11.8x
S&P 500
21.1x
-44%
Technology
19.5x
-39%
5Y Avg
1.8x
+549%
Price/Sales
1.5x
S&P 500
3.1x
-52%
Technology
2.4x
-38%
5Y Avg
0.1x
+1274%
Dividend Yield
2.44%
S&P 500
1.87%
+31%
Technology
1.16%
+111%
5Y Avg
—
—
| Metric | ERIC | S&P 500 | Technology | 5Y Avg ERIC |
|---|---|---|---|---|
| Forward PE | 2.0x | 19.1x-89% | 22.1x-91% | — |
| Trailing PE | 13.7x | 25.1x-45% | 26.7x-49% | 1.3x+998% |
| PEG Ratio | 1.21x | 1.72x-29% | 1.52x-20% | — |
| EV/EBITDA | 9.0x | 15.2x-41% | 17.5x-49% | 1.0x+798% |
| Price/FCF | 11.8x | 21.1x-44% | 19.5x-39% | 1.8x+549% |
| Price/Sales | 1.5x | 3.1x-52% | 2.4x-38% | 0.1x+1274% |
| Dividend Yield | 2.44% | 1.87% | 1.16% | — |
ERIC trades above S&P 500 benchmarks on 0 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolERIC Financial Health
Verdict
Strong
ERIC generates $29.1B in free cash flow at a 12.6% margin — 22.3% ROIC signals a durable competitive advantage · returns 2.4% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$230.0B
Revenue Growth
TTM vs prior year
-7.7%
Gross Margin
Gross profit as a share of revenue
48.1%
Operating Margin
Operating income divided by revenue
13.8%
Net Margin
Net income divided by revenue
12.1%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$8.30
Free Cash Flow (TTM)
Cash generation after capex
$29.1B
FCF Margin
FCF as share of revenue — the primary cash quality signal
12.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
22.3%
ROA
Return on assets, trailing twelve months
10.0%
Cash & Equivalents
Liquid assets on the balance sheet
$43.9B
Net Debt
Total debt minus cash
$2.1B
Debt Serviceability
Net debt as a multiple of annual free cash flow
0.1× FCF
~0.1 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
29.0%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.4%
Dividend
2.4%
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
$2.68
Payout Ratio
Share of earnings distributed as dividends
33.6%
Shares Outstanding
Current diluted share count
3.3B
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageERIC Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Cybersecurity Threats
Ericsson faces advanced threat actors targeting its 5G and other digital infrastructure, with attacks aimed at disrupting, damaging, or infiltrating critical systems. The company has established a Cyber Defense Center to monitor, detect, and respond to such incidents, but successful breaches could lead to significant operational downtime and reputational damage.
High Risk
Geopolitical & Trade Uncertainty
Restrictions on Chinese vendors in national 5G networks create uncertainty in the China‑US trade relationship, potentially eroding Ericsson’s market share in China, a key growth region. Such geopolitical tensions could limit sales and delay deployments in a market that accounts for a sizable portion of its revenue.
High Risk
Market & Competition
The hardware segment is under pressure from open‑source and open‑products, threatening Ericsson’s competitive advantage and requiring new revenue streams. Intense competition in the telecom equipment sector further compresses margins and could reduce market share.
Medium
Operational & Execution Risks
Ericsson disclosed 43 risk factors, with the “Ability to Sell” category most prominent. The transition from hardware to software, uneven revenue and cash‑flow trends, and a potentially flat 2026 RAN market with elevated restructuring costs could impair profitability.
Medium
Legal & Compliance Issues
Past scrutiny over alleged payments to ISIS and bribery in Iraq has raised concerns about management credibility and investor confidence. Potential regulatory penalties or litigation could result in financial losses and reputational harm.
Medium
Supply Chain Disruptions
Historical events, such as the 2000 fire at a Philips microchip plant, caused substantial lost sales and forced Ericsson out of the mobile phone business. Ongoing supply chain vulnerabilities could similarly impact production and revenue.
Lower
Financial & Valuation Risks
While profitability and cash position have improved, revenue and cash‑flow trends remain uncertain. Some analysts view the stock as overvalued on certain metrics, which could affect future share price performance.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why ERIC Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
5G Infrastructure Dominance
Ericsson is a leading provider of ICT and telecommunications equipment, especially in the 5G infrastructure space. The global rollout of 5G networks presents a significant growth opportunity as operators invest heavily in upgrading their infrastructure. Ericsson’s Networks segment offers hardware, software, and services for intelligent, reliable, and flexible 5G networks.
Bullish Technical Trend
Technical analyses indicate a bullish trend for Ericsson on both short and long timeframes, with consistently positive signals over the past month. The company has experienced a golden cross event, where its 50‑day moving average crossed above its 200‑day moving average, often seen as a bullish technical signal.
Strategic Partnerships & AI Innovation
Ericsson’s Vonage division has deepened its partnership with ServiceNow to integrate voice and AI into enterprise workflows, enhancing its service offerings. The company is also involved in innovative projects, such as receiving an AI‑powered Vinci humanoid robot, underscoring its focus on future technologies.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
ERIC Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$11.93
52W Range Position
95%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$7.16
+66.6% from the low
52-Week High
$12.19
-2.1% from the high
1 Month
+3.38%
3 Month
+9.05%
YTD
+25.6%
1 Year
+44.6%
3Y CAGR
+30.1%
5Y CAGR
-2.7%
10Y CAGR
+4.4%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
ERIC vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
2.0x
vs 40.2x median
-95% below peer median
Revenue Growth
-6.9%
vs +4.2% median
-263% below peer median
Net Margin
12.1%
vs 4.0% median
+203% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
ERI ERIC Telefonaktiebolaget LM Ericsson (publ) | $36.6B | 2.0x | -6.9% | 12.1% | Hold | -41.8% |
NOK NOK Nokia Oyj | $76.8B | 40.2x | +0.8% | 4.0% | Buy | -14.2% |
CSC CSCO Cisco Systems, Inc. | $373.4B | 22.7x | +4.2% | 18.8% | Buy | +2.3% |
HPE HPE Hewlett Packard Enterprise Company | $39.9B | 12.5x | +11.7% | -0.4% | Hold | -4.4% |
VIA VIAV Viavi Solutions Inc. | $12.5B | 58.3x | +3.7% | -4.0% | Buy | -40.2% |
CIE CIEN Ciena Corporation | $77.1B | 88.6x | +15.7% | 4.5% | Buy | -38.7% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
ERIC Dividend and Capital Return
ERIC returns 2.4% total yield, led by a 2.44% dividend, raised 6 consecutive years.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
2.4%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
2.44%
Payout Ratio
33.6%
How ERIC Splits Its Return
Div 2.44%
Dividend 2.44%Buybacks 0.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$2.68
Growth Streak
Consecutive years of dividend increases
6Y
3Y Div CAGR
6.0%
5Y Div CAGR
13.0%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
2 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
3.3B
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.17 | — | — | — |
| 2025 | $0.29 | +14.0% | 0.0% | 27.8% |
| 2024 | $0.26 | +2.1% | 0.0% | 35.0% |
| 2023 | $0.25 | +2.4% | 0.0% | 40.7% |
| 2022 | $0.25 | +6.8% | 0.0% | 43.2% |
FAQ
7 questionsERIC Investor Questions
Common questions answered from live analyst data and company financials.
01Is Telefonaktiebolaget LM Ericsson (publ) (ERIC) stock a buy or sell in 2026?
Telefonaktiebolaget LM Ericsson (publ) (ERIC) is rated Hold by Wall Street analysts as of 2026. Of 40 analysts covering the stock, 15 rate it Buy or Strong Buy, 23 rate it Hold, and 2 rate it Sell or Strong Sell. The consensus 12-month price target is $7, implying -41.8% from the current price of $12.
02What is the ERIC stock price target for 2026?
The Wall Street consensus price target for ERIC is $7 based on 40 analyst estimates. The high-end target is $8 (-34.8% from today), and the low-end target is $6 (-48.9%). The base case model target is $75.
03Is Telefonaktiebolaget LM Ericsson (publ) (ERIC) stock overvalued in 2026?
ERIC trades at 2.0x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Telefonaktiebolaget LM Ericsson (publ) (ERIC) stock in 2026?
The primary risks for ERIC in 2026 are: (1) Cybersecurity Threats — Ericsson faces advanced threat actors targeting its 5G and other digital infrastructure, with attacks aimed at disrupting, damaging, or infiltrating critical systems. (2) Geopolitical & Trade Uncertainty — Restrictions on Chinese vendors in national 5G networks create uncertainty in the China‑US trade relationship, potentially eroding Ericsson’s market share in China, a key growth region. (3) Market & Competition — The hardware segment is under pressure from open‑source and open‑products, threatening Ericsson’s competitive advantage and requiring new revenue streams. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Telefonaktiebolaget LM Ericsson (publ)'s revenue and earnings forecast?
Analyst consensus estimates ERIC will report consensus revenue of $214.1B (-6.9% year-over-year) and EPS of $6.38 (-23.1% year-over-year) for the upcoming fiscal year. The following year, analysts project $198.5B in revenue.
06When does Telefonaktiebolaget LM Ericsson (publ) (ERIC) report its next earnings?
A confirmed upcoming earnings date for ERIC is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Telefonaktiebolaget LM Ericsson (publ) generate?
Telefonaktiebolaget LM Ericsson (publ) (ERIC) generated $29.1B in free cash flow over the trailing twelve months — a free cash flow margin of 12.6%. ERIC returns capital to shareholders through dividends (2.4% yield) and share repurchases ($0 TTM).