Ericsson (ERIC) Outpaces Stock Market Gains: What You Should Know

·3-min read

Ericsson (ERIC) closed the most recent trading day at $13.90, moving +1.53% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.74%.

Heading into today, shares of the telecommunications equipment provider had lost 1.86% over the past month, lagging the Computer and Technology sector's gain of 3.03% and the S&P 500's gain of 3.21% in that time.

The company is expected to report EPS of $0.13, up 30% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.65 billion, up 15.83% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.76 per share and revenue of $28.38 billion. These totals would mark changes of +18.75% and +11.48%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for ERIC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.56% lower. ERIC is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ERIC currently has a Forward P/E ratio of 17.95. This represents a discount compared to its industry's average Forward P/E of 19.89.

We can also see that ERIC currently has a PEG ratio of 2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Wireless Equipment stocks are, on average, holding a PEG ratio of 2.21 based on yesterday's closing prices.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 114, which puts it in the top 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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