| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 76 | 18.2x | 17.3x | Top tier | |
Growth | 35 | -0.3% | 7.1% | Bottom tier | |
Quality | 89 | 20.6% | 4.5% | Top tier | |
Safety | 66 | — | 2.6x | Top tier | |
Capital Return | 93 | 2.77% | 0.06% | Top tier | |
Momentum | 54 | 0.0% | -1.6% | Around median | |
Sentiment | 61 | 6 | 3 | Around median |
The floor: what the company is worth if growth stopped today
5% of today's price is what a buyer pays for growth that has not happened yet.
10-year US Treasury yield 4.96% as of 2026-10-22. Estimates computed from company data and analyst targets, 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 sells mobile communications infrastructure, network software and services, and enterprise connectivity solutions. The business relies primarily on Networks, its largest segment, alongside Cloud Software and Services and Enterprise; reported sales for the first two segments were 33.0 billion SEK and 14.7 billion SEK, respectively, in Q2 fiscal 2026, while Enterprise delivered organic growth of 3%. Expansion opportunities identified by management include programmable networks, network APIs, enterprise connectivity, mission-critical networks, and defense applications.
In Q2 fiscal 2026, for the period ended 2026-06-30, Ericsson recorded revenue of 54.3 billion SEK, down 1.3% year over year from 55.0 billion SEK, net income of 4.2 billion SEK, and diluted earnings per share of 1.25. Gross margin increased to 48.4% from 48.0% in Q2 fiscal 2025, while operating margin was 12.3% versus 12.4%. Operating cash flow was 1.9 billion SEK, compared with 7.7 billion SEK in Q1 fiscal 2026 and 4.1 billion SEK in Q2 fiscal 2025.
Networks remained the operational core, but its reported sales fell 8% year over year to 33.0 billion SEK in Q2 fiscal 2026, while reported Cloud Software and Services sales rose 3% to 14.7 billion SEK and grew organically by 5% across all regions. Cloud Software and Services achieved an adjusted gross margin of 44.1% and an adjusted EBITDA margin of 14.2%, while Enterprise recorded an adjusted EBITDA loss of 0.8 billion SEK. On a last-12-month basis through 2026-06-30, the company generated revenue of 235.5 billion SEK, net income of 25.4 billion SEK, and free cash flow of 31.9 billion SEK.
Q2 FY2026
Last 12 months to 2026-06-30
When: 2026-10-13
Adjusted gross margin for Networks versus the 48%-50% range
Group revenue versus 54.3 billion SEK
Operating cash flow versus 1.9 billion SEK
The discounted cash flow model estimates the value at 14 dollars within a range of 12 dollars to 18 dollars and at a discount rate of 8.8%, measuring the value of the cash Ericsson can generate, and tests across major companies show that this model is inherently conservative. The no-growth value is 10 dollars at a discount rate of 8.8%, representing what remains if current after-tax operating profit stays constant forever. Meanwhile, the targets of five analysts have a median of 9.00 dollars, which is also the highest and lowest target, and this method reflects expected growth and is inherently inclined toward optimism. The no-growth value is close to the analyst target, while the discounted cash flow model gives a higher value and a wider range because it prices future cash flows rather than assuming growth stops; both models use the 10-year U.S. Treasury yield of 5.18% as of 2026-09-24 among their discount inputs.
Figures in the text are as of 2026-09-27; the live price is shown at the top of the page.
Networks represents the largest business and recorded reported sales of 33.0 billion SEK in Q2 fiscal 2026, for the period ended 2026-06-30. Cloud Software and Services recorded reported sales of 14.7 billion SEK and organic growth of 5%, while Enterprise delivered organic growth of 3%. The expansion sources targeted by the company include programmable networks, network APIs, enterprise connectivity, mission-critical networks, and defense applications.
Revenue was 54.3 billion SEK in Q2 fiscal 2026, for the period ended 2026-06-30, down 1.3% year over year from 55.0 billion SEK. The company recorded net income of 4.2 billion SEK and diluted earnings per share of 1.25, with a gross margin of 48.4% and an operating margin of 12.3%. Operating cash flow was 1.9 billion SEK, below 4.1 billion SEK in the comparable quarter of fiscal 2025.
Automated analysis for informational purposes only — not investment advice.
The price of components linked to the semiconductor supply chain is rising, and long-term contracts typically do not automatically pass through this increase. Management expects an adjusted gross margin for Networks of between 48% and 50% in Q3 fiscal 2026, compared with 50.4% in Q2, because of a greater mix of deployment projects. The company is responding by raising tender prices, renegotiating, substituting products, and redesigning them, but design measures require six to nine months.
The discounted cash flow model values the company at 14 dollars within a range of 12 dollars to 18 dollars, while the no-growth value is 10 dollars. The median target of five analysts is 9.00 dollars, with a neutral consensus and the highest and lowest targets both at 9 dollars. The cash flow model reflects future cash flows, while the no-growth value assumes constant after-tax operating profit, and analyst targets price their growth expectations.
Ericsson announced that Per Narvinger will assume the role of CEO on 2026-10-01, succeeding Börje Ekholm, who described the Q2 fiscal 2026 earnings call as his final quarterly call as CEO. Narvinger has spent nearly 30 years at Ericsson, led Networks for approximately a year and a half, and previously led the transformation of Cloud Software and Services. The company said Ekholm and Narvinger would work together during a transition period lasting two to three months to ensure a smooth handover.