Telefonaktiebolaget LM Ericsson (publ)

ERIC

Communication Equipment · Technology

Price

$9.82

-0.07 (-0.71%)

Market Cap

$32.42B

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecom and other sectors. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment offers radio access network solutions for various network spectrum bands, including integrated high-performing hardware and software. This segment also provides integrated antenna and tra

Winston Score History

Share count broadly stable

+0.3% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 3.33B (2021) → 3.34B (2025)

Score breakdown

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Quality

Gross Margin

48.1%

Healthy — 48.1% gross margin

Operating Margin

10.7%

Modest — 10.7% operating margin

ROCE

4.1%

Weak — 4.1% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

-6.5%

Shrinking sales (-6.5% YoY)

EPS YoY

+1562.2%

Earnings growing fast (1562.2% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

142%

Turns 142% of profit into real cash

FCF Margin

14.2%

Converts sales into free cash efficiently (14.2%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.32

Conservative — low debt load (0.32)

Interest Cover

11.18x

Comfortably covers interest (11.2x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

1.3x

Attractive valuation — P/E 1.3

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

-0.2

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Dividend Yield

2.64%

Moderate income — 2.64% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+18.7%

Dividend growing fast (18.7% YoY)

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