| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 86 | 13.1x | 17.8x | Top tier | |
Growth | 38 | -2.4% | 7.1% | Bottom tier | |
Quality | 88 | 21.1% | 4.5% | Top tier | |
Safety | 75 | — | 2.6x | Top tier | |
Capital Return | 80 | 2.82% | 2.12% | Top tier | |
Momentum | 43 | 25.6% | 2.9% | Around median | |
Sentiment | 82 | 6 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Telefonaktiebolaget LM Ericsson is a supplier of telecommunications equipment, software, and services, with its business concentrated in three segments: Networks, Cloud Software and Services, and Enterprise. The Networks segment generates revenue from mobile network solutions, including radio access networks, software, and deployment projects, while Cloud Software and Services provides software and operational services to telecom operators. Enterprise includes enterprise connectivity businesses, including Global Communications Platform and Enterprise Wireless Solutions, as well as Vonage and private networks.
In the second quarter of fiscal year 2026, sales amounted to SEK 52.7 billion, declining organically by 1% year over year, but growing by 1% after excluding the non-recurring intellectual property rights settlement recorded in the comparative quarter. Adjusted gross profit amounted to SEK 25.5 billion, with a margin of 48.4%, and adjusted earnings before interest, taxes, depreciation, and amortization amounted to SEK 6.9 billion, with a margin of 13.1%. Networks generated sales of SEK 33 billion and an adjusted gross margin of 50.4%, compared with sales of SEK 14.7 billion and a margin of 44.1% in Cloud Software and Services, while Enterprise remained loss-making, with adjusted earnings before interest, taxes, depreciation, and amortization of negative SEK 0.8 billion.
For fiscal year 2025, the financial statements reported revenue of $236.7 billion, gross profit of $112.7 billion, net income of $28.7 billion, and earnings per share of 8.51. This compares with revenue of $247.9 billion and net income of $374 million in fiscal year 2024, and a net loss of $26.1 billion in fiscal year 2023. These figures show a significant improvement in profitability between fiscal years 2023 and 2025, alongside the continued contraction in annual revenue from its peak of $271.5 billion in fiscal year 2022.
The analyst consensus on ERIC is Neutral, with an average price target of $6.94 and a target range from $6.10 to $7.78. The average target is below the lower end of the 52-week range of $7.71, while the highest target of $7.78 exceeds that lower end only by a limited margin; this positioning reflects the market's balancing of improved profitability against continued weak Networks growth and component-cost pressures.
Figures in the text are as of 2026-08-28; the live price is shown at the top of the page.
Sales amounted to SEK 52.7 billion, with an organic decline of 1% year over year. After excluding the non-recurring intellectual property rights settlement in the comparative quarter, organic sales grew by 1%. The adjusted gross margin was 48.4%, while adjusted earnings before interest, taxes, depreciation, and amortization amounted to SEK 6.9 billion, with a margin of 13.1%.
Networks was the largest segment in the second quarter of fiscal year 2026, with sales of SEK 33 billion out of total group sales of SEK 52.7 billion. The segment recorded an adjusted gross margin of 50.4% and adjusted earnings before interest, taxes, depreciation, and amortization of SEK 5.8 billion. However, its reported sales declined by 8%, and organic sales fell by 4% due to the impact of the intellectual property rights settlement in the comparative period and weakness in some markets.
The segment grew organically by 5% in the second quarter of fiscal year 2026, and its reported sales increased by 3% to SEK 14.7 billion. The adjusted gross margin improved to 44.1% from 43.2%, and adjusted earnings before interest, taxes, depreciation, and amortization amounted to SEK 1.8 billion, with a margin of 14.2%. Management confirmed that the results did not benefit from non-recurring items, but reflected delivery efficiency, expense reductions, and portfolio focus.
Automated analysis for informational purposes only — not investment advice.
Management said on July 14, 2026, that higher component costs began in the second quarter of fiscal year 2026 and that their financial impact would gradually accumulate during the second half of fiscal year 2026 and extend into the following year. Most long-term contracts do not include automatic inflation pass-through, so the company relies on renegotiation, higher tender prices, product substitution, and cost reductions. Product redesigns also take between six and nine months, creating a time gap between the cost increase and the completion of mitigation measures.
Ericsson announced that Per Narvinger will assume the position of chief executive officer on October 1, 2026, succeeding Börje Ekholm. Narvinger has spent about 30 years at the company and led Networks for a year and a half before the announcement, having previously led the transformation of Cloud Software and Services. Ekholm explained during the July 14, 2026, call that he would work with Narvinger over the following two or three months to ensure a smooth transition.
Management believes that the shift of artificial intelligence into industrial and physical applications could increase demand for mobile connectivity, low latency, and uplink capacity. Ericsson noted during the July 14, 2026, call that broader demand for uplink traffic was emerging, but did not attribute it to a single specific application. The company's RAN suite can run on x86 processors, graphics processing units, or Ericsson custom silicon, with management emphasizing that custom silicon provides advantages in cost, energy efficiency, and field performance in 2026.
