Telefonaktiebolaget LM Ericsson (publ) (ERIC) Financial Ratios
30 years of historical data (1996–2025) · Technology · Communication Equipment
EV/EBITDA
↑
8.99
↑+798% vs avg
5yr avg: 1.00
30Y Low0.4·High5.5
P/FCF
↑
11.83
↑+549% vs avg
5yr avg: 1.82
30Y Low0.6·High33.8
P/B Ratio
↓
3.33
↑+1195% vs avg
5yr avg: 0.26
30Y Low0.1·High1.8
ROE
↑
26.3%
↓+191% vs avg
5yr avg: 9.0%
30Y Low-26%·High28%
Debt/EBITDA
↑
1.22
↓-20% vs avg
5yr avg: 1.52
30Y Low0.4·High2.3
Percentile shows where the current value sits in 30-year historical distribution. Sparklines show 5-year trend.
ERIC Valuation Multiples
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
Telefonaktiebolaget LM Ericsson (publ) trades at 13.7x earnings, 96% below its 5-year average of 336.8x, sitting at the 100th percentile of its historical range. Compared to the Technology sector median P/E of 26.7x, the stock trades at a discount of 49%. On a free-cash-flow basis, the stock trades at 11.8x P/FCF, 549% above the 5-year average of 1.8x.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $36.6B | $32.3B | $26.9B | $21.0B | $19.5B | $36.2B | $39.7B | $29.1B | $29.4B | $22.2B | $19.3B |
| Enterprise Value | $36.9B | $34.4B | $28.6B | $40.1B | $23.3B | $23.3B | $35.6B | $31.6B | $24.1B | $19.3B | $8.9B |
| P/E Ratio → | 13.73 | 1.21 | 1343.33 | — | 1.03 | 1.52 | 2.55 | 13.72 | — | — | 10.60 |
| P/S Ratio | 1.52 | 0.14 | 0.10 | 0.08 | 0.07 | 0.15 | 0.19 | 0.13 | 0.13 | 0.11 | 0.08 |
| P/B Ratio | 3.33 | 0.29 | 0.29 | 0.22 | 0.15 | 0.34 | 0.47 | 0.37 | 0.33 | 0.22 | 0.14 |
| P/FCF | 11.83 | 1.13 | 0.59 | 5.70 | 0.73 | 0.97 | 1.83 | 2.58 | 5.30 | 3.95 | 2.29 |
| P/OCF | 10.89 | 1.04 | 0.56 | 3.08 | 0.62 | 0.88 | 1.54 | 1.80 | 3.05 | 2.36 | 1.29 |
P/E links to full P/E history page with 30-year chart
ERIC EV Ratios
Enterprise-value multiples — capital-structure-neutral measures of total business value
Telefonaktiebolaget LM Ericsson (publ)'s enterprise value stands at 9.0x EBITDA, 798% above its 5-year average of 1.0x. The Technology sector median is 17.5x, placing the stock at a 49% discount on an enterprise-value basis.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 0.15 | 0.11 | 0.16 | 0.08 | 0.10 | 0.17 | 0.14 | 0.11 | 0.10 | 0.04 |
| EV / EBITDA | 8.99 | 0.91 | 1.44 | 1.51 | 0.59 | 0.56 | 1.09 | 1.13 | 1.55 | — | 0.37 |
| EV / EBIT | 11.04 | 0.89 | 4.28 | — | 0.87 | 0.71 | 1.34 | 2.87 | 48.13 | — | 1.48 |
| EV / FCF | — | 1.21 | 0.62 | 10.90 | 0.87 | 0.63 | 1.64 | 2.80 | 4.34 | 3.43 | 1.06 |
ERIC Profitability
Margins and return-on-capital ratios measuring operating efficiency
Telefonaktiebolaget LM Ericsson (publ) earns an operating margin of 13.8%. Operating margins have expanded from 6.8% to 13.8% over the past 3 years, signaling improving operational efficiency. ROE of 26.3% indicates solid capital efficiency. ROIC of 22.3% represents excellent returns on invested capital.
Margins
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 48.1% | 48.1% | 44.9% | 39.6% | 41.8% | 43.5% | 40.6% | 37.5% | 35.2% | 24.6% | 30.6% |
| Operating Margin | 13.8% | 13.8% | 3.6% | 6.8% | 11.3% | 14.0% | 12.7% | 9.7% | 4.9% | -6.9% | 6.0% |
| Net Profit Margin | 12.0% | 12.0% | 0.0% | -10.0% | 6.9% | 9.8% | 7.5% | 1.0% | -3.1% | -15.9% | 0.8% |
Return on Capital
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 26.3% | 26.3% | 0.0% | -22.0% | 15.9% | 24.9% | 18.9% | 2.5% | -7.2% | -26.5% | 1.3% |
| ROA | 9.3% | 9.3% | 0.0% | -7.6% | 5.8% | 8.2% | 5.7% | 0.8% | -2.5% | -11.4% | 0.6% |
| ROIC | 22.3% | 22.3% | 6.6% | 10.2% | 20.3% | 29.5% | 24.2% | 19.1% | 8.9% | -9.1% | 8.2% |
| ROCE | 18.4% | 18.4% | 5.4% | 8.8% | 16.1% | 20.3% | 16.6% | 13.1% | 6.4% | -7.6% | 7.3% |
ERIC Leverage & Debt
Solvency and debt-coverage ratios — lower is generally safer
Telefonaktiebolaget LM Ericsson (publ) carries a Debt/EBITDA ratio of 1.2x, which is manageable (58% below the sector average of 2.9x). Net debt stands at $2.1B ($46.0B total debt minus $43.9B cash). Interest coverage of 10.7x signals virtually no risk of debt distress — earnings comfortably cover interest obligations.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.42 | 0.42 | 0.49 | 0.56 | 0.32 | 0.38 | 0.46 | 0.58 | 0.38 | 0.34 | 0.19 |
| Debt / EBITDA | 1.22 | 1.22 | 2.30 | 2.05 | 1.05 | 0.98 | 1.21 | 1.66 | 2.17 | — | 1.13 |
| Net Debt / Equity | — | 0.02 | 0.02 | 0.20 | 0.03 | -0.12 | -0.05 | 0.03 | -0.06 | -0.03 | -0.07 |
| Net Debt / EBITDA | 0.06 | 0.06 | 0.08 | 0.72 | 0.10 | -0.31 | -0.13 | 0.09 | -0.34 | — | -0.43 |
| Debt / FCF | — | 0.07 | 0.04 | 5.20 | 0.14 | -0.35 | -0.19 | 0.21 | -0.96 | -0.52 | -1.23 |
| Interest Coverage | 10.73 | 10.73 | 2.53 | 5.17 | 15.74 | 18.74 | 13.32 | 9.24 | 5.16 | -9.66 | 8.16 |
ERIC Liquidity & Efficiency
Short-term solvency ratios and asset-utilisation metrics
A current ratio of 1.29x means Telefonaktiebolaget LM Ericsson (publ) can comfortably meet its short-term obligations, though there is limited excess liquidity. The current ratio has improved from 1.20x to 1.29x over the past 3 years.
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.29 | 1.29 | 1.17 | 1.20 | 1.19 | 1.38 | 1.31 | 1.32 | 1.45 | 1.54 | 1.85 |
| Quick Ratio | 1.08 | 1.08 | 0.96 | 0.92 | 0.88 | 1.10 | 1.06 | 1.05 | 1.19 | 1.28 | 1.52 |
| Cash Ratio | 0.51 | 0.51 | 0.43 | 0.35 | 0.32 | 0.53 | 0.44 | 0.44 | 0.41 | 0.43 | 0.53 |
| Asset Turnover | — | 0.80 | 0.87 | 0.81 | 0.79 | 0.80 | 0.76 | 0.81 | 0.79 | 0.74 | 0.82 |
| Inventory Turnover | 4.92 | 4.92 | 5.25 | 4.17 | 3.51 | 3.89 | 4.31 | 4.56 | 4.76 | 5.81 | 5.18 |
| Days Sales Outstanding | — | 104.12 | 95.87 | 104.33 | 101.69 | 104.20 | 121.36 | 113.31 | 144.07 | 153.41 | 137.98 |
ERIC Shareholder Yields
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Telefonaktiebolaget LM Ericsson (publ) returns 2.4% to shareholders annually primarily through dividends. The payout ratio of 33.6% is conservative, leaving significant room for dividend growth or reinvestment. The earnings yield of 7.3% (inverse of P/E) provides a useful comparison to bond yields when assessing the stock's relative attractiveness to fixed income.
Dividends
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.4% | 27.8% | 35.0% | 40.7% | 43.2% | 20.0% | 13.4% | 14.7% | 12.0% | 15.1% | 66.8% |
| Payout Ratio | 33.6% | 33.6% | 44984.3% | — | 44.5% | 30.4% | 34.3% | 200.2% | — | — | 702.7% |
Total Shareholder Return Metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 7.3% | 82.9% | 0.1% | — | 97.1% | 66.0% | 39.2% | 7.3% | — | — | 9.4% |
| FCF Yield | 8.5% | 88.4% | 170.8% | 17.5% | 136.9% | 102.9% | 54.8% | 38.7% | 18.9% | 25.3% | 43.7% |
| Buyback Yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.1% | 0.1% |
| Total Shareholder Yield | 2.4% | 27.8% | 35.0% | 40.7% | 43.2% | 20.0% | 13.4% | 14.7% | 12.0% | 15.2% | 66.9% |
| Shares Outstanding | — | $3.3B | $3.3B | $3.3B | $3.3B | $3.3B | $3.3B | $3.3B | $3.3B | $3.3B | $3.3B |
Peer Comparison
Compare ERIC with 10 similar companies in its peer group
| Company | Market Cap | P/E | EV/EBITDA | P/FCF | Gross Margin | Op Margin | ROE | ROIC | Debt/EBITDA |
|---|---|---|---|---|---|---|---|---|---|
 ERICYou | $37B | 13.7 | 9.0 | 11.8 | 48.1% | 13.8% | 26.3% | 22.3% | 1.2 |
 NOK | $77B | 104.0 | 34.3 | 46.5 | 43.5% | 3.9% | 3.1% | 3.0% | 2.7 |
 CSCO | $373B | 37.0 | 26.9 | 28.1 | 64.9% | 20.8% | 22.1% | 13.0% | 2.0 |
 HPE | $40B | -673.5 | 12.9 | 63.7 | 28.8% | 4.8% | 0.2% | 3.5% | 5.1 |
 VIAV | $12B | 359.8 | 95.5 | 201.4 | 56.8% | 6.5% | 4.8% | 5.5% | 5.2 |
 CIEN | $77B | 640.9 | 171.9 | 115.8 | 41.5% | 6.5% | 4.4% | 6.9% | 3.5 |
 ADTN | $1B | -26.8 | 18.0 | 12.6 | 38.3% | -1.4% | -8.5% | -1.7% | 3.2 |
 CALX | $3B | 176.2 | 73.5 | 25.6 | 56.8% | 2.1% | 2.2% | 2.1% | 0.7 |
 COMM | $4B | -10.0 | 18.2 | 15.9 | 31.8% | 7.9% | — | 3.7% | 13.4 |
 QCOM | $197B | 37.2 | 14.7 | 15.3 | 55.4% | 27.9% | 23.3% | 29.1% | 1.2 |
 MRVL | $146B | 55.0 | 111.9 | 104.7 | 51.0% | 16.1% | 19.3% | 6.0% | 3.4 |
| Technology Median | — | 26.7 | 17.5 | 19.5 | 48.9% | -0.6% | 2.5% | 3.0% | 2.9 |
Peer selection based on competitive and market overlap. Compare multiple stocks →
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Start ComparisonERIC — Frequently Asked Questions
Quick answers to the most common questions about buying ERIC stock.
What is Telefonaktiebolaget LM Ericsson (publ)'s P/E ratio?
Telefonaktiebolaget LM Ericsson (publ)'s current P/E ratio is 13.7x. The historical average is 4.2x. This places it at the 100th percentile of its historical range.
What is Telefonaktiebolaget LM Ericsson (publ)'s EV/EBITDA?
Telefonaktiebolaget LM Ericsson (publ)'s current EV/EBITDA is 9.0x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 1.3x.
What is Telefonaktiebolaget LM Ericsson (publ)'s ROE?
Telefonaktiebolaget LM Ericsson (publ)'s return on equity (ROE) is 26.3%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 7.3%.
Is ERIC stock overvalued?
Based on historical data, Telefonaktiebolaget LM Ericsson (publ) is trading at a P/E of 13.7x. This is at the 100th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
What is Telefonaktiebolaget LM Ericsson (publ)'s dividend yield?
Telefonaktiebolaget LM Ericsson (publ)'s current dividend yield is 2.44% with a payout ratio of 33.6%.
What are Telefonaktiebolaget LM Ericsson (publ)'s profit margins?
Telefonaktiebolaget LM Ericsson (publ) has 48.1% gross margin and 13.8% operating margin. Operating margin between 10-20% is typical for established companies.
How much debt does Telefonaktiebolaget LM Ericsson (publ) have?
Telefonaktiebolaget LM Ericsson (publ)'s Debt/EBITDA ratio is 1.2x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.