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Telefonaktiebolaget LM Ericsson (publ)

ERIC-B.ST

Communication Equipment · Technology

Price

kr 116.60

+3.90 (+3.46%)

Market Cap

kr 387.23B

Exchange

Stockholm Stock Exchange

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Winston Score between 40 and 70. The stock passes some quality checks but not all.

Ericsson is a Swedish company that builds the equipment and software that powers mobile networks around the world. Its main products include radio antennas, base stations, and network management software sold to telecom operators like AT&T, Verizon, and Vodafone. It is one of only three major global suppliers of 5G network infrastructure, alongside Nokia and Huawei.

Ericsson earns most of its revenue by selling hardware and software to telecom carriers, and it also collects patent licensing fees from smartphone makers who use its wireless technology. The company operates globally, with strong presence in North America, Europe, and Asia, and generates roughly $25 billion in annual revenue. Its deep patent portfolio and long-term carrier relationships create switching costs, but the business is heavily tied to how much telecom operators choose to spend on network upgrades — meaning a slowdown in 5G investment spending is the key risk to watch.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-10.3% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-78.4% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$48.3B/ year

↓ Declining (-6% vs prior year)

20.4% of revenue

In line with sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

12.5%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

$52.3B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Telefonaktiebolaget LM Ericsson (publ)'s revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

48.1%

Healthy — 48.1% gross margin

Operating Margin

10.7%

Modest — 10.7% operating margin

ROCE

3.9%

Weak — 3.9% 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

-7.4%

Shrinking sales (-7.4% YoY)

EPS YoY

+1442.9%

Earnings growing fast (1442.9% 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

14.4%

Converts sales into free cash efficiently (14.4%)

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

11.26x

Comfortably covers interest (11.3x)

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

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Valuation

P/E Ratio

N/A

Data not available

P/E vs Forward

N/A

not available

Data not available

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Dividends

Dividend Yield

2.41%

Moderate income — 2.41% yield

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

Dividend Growth

+8.3%

Dividend growing modestly (8.3% YoY)

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