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Ericsson (ERIC) Gains But Lags Market: What You Should Know

By Zacks Investment ResearchStock MarketsMar 05, 2021 05:50AM ET
www.investing.com/analysis/ericsson-eric-gains-but-lags-market-what-you-should-know-200565413
Ericsson (ERIC) Gains But Lags Market: What You Should Know
By Zacks Investment Research   |  Mar 05, 2021 05:50AM ET
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Ericsson (BS:ERICAs) (ERIC) closed at $12.13 in the latest trading session, marking a +0.41% move from the prior day. This change lagged the S&P 500's 1.95% gain on the day. At the same time, the Dow added 1.85%, and the tech-heavy Nasdaq gained 1.55%.

Coming into today, shares of the telecommunications equipment provider had lost 8.42% in the past month. In that same time, the Computer and Technology sector lost 6.69%, while the S&P 500 lost 2.45%.

Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. On that day, ERIC is projected to report earnings of $0.12 per share, which would represent year-over-year growth of 50%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.35 billion, up 23.28% from the year-ago period.

ERIC's full-year Zacks Consensus Estimates are calling for earnings of $0.80 per share and revenue of $29.2 billion. These results would represent year-over-year changes of +25% and +14.7%, respectively.

It is also important to note the recent changes to analyst estimates for ERIC. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ERIC is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ERIC currently has a Forward P/E ratio of 15.19. This represents a discount compared to its industry's average Forward P/E of 20.28.

It is also worth noting that ERIC currently has a PEG ratio of 0.53. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless Equipment industry currently had an average PEG ratio of 1.64 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 99, which puts it in the top 39% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Ericsson (ERIC) Gains But Lags Market: What You Should Know
 

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Ericsson (ERIC) Gains But Lags Market: What You Should Know

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