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Telefonaktiebolaget LM Ericsson (ERIC) AI Stock Analysis
Telefonaktiebolaget LM Ericsson
(NASDAQ:ERIC)
ERIC scores well primarily on improving financial performance and strong cash generation with manageable leverage. Earnings-call commentary supports the recovery (growth and margin strength in Networks, cost control), while near-term risks include component-cost pressure, restructuring charges, and a flagged 2027 transition period. Technicals are constructive but look somewhat stretched, and valuation is broadly fair with a supportive dividend yield.
Telefonaktiebolaget LM Ericsson (ERIC) vs. SPDR S&P 500 ETF (SPY)
- Market Cap
- $36.83B
- Dividend Yield
- 2.78%
- Average Volume (3M)
- 9.72M
- Price to Earnings (P/E)
- 18.7
- Beta (1Y)
- 0.53
- Revenue Growth
- 3.88%
- EPS Growth
- -16.99%
- Country
- US
- Employees
- 88,826
- Sector
- Technology
- Sector Strength
- 61
- Industry
- Communication Equipment
Telefonaktiebolaget LM Ericsson Business Overview & Revenue Model
Company Description
Telefonaktiebolaget LM Ericsson (publ), along with its various subsidiaries, operates as a global supplier of communication infrastructure, software, and service solutions, primarily serving the telecommunications industry and other diverse sectors....
How the Company Makes Money
Ericsson primarily makes money by selling telecommunications network equipment, software, and services to communications service providers (mobile network operators) and, to a lesser extent, enterprises and public-sector customers. 1) Network infrast...
Telefonaktiebolaget LM Ericsson Earnings Call Summary
The call was predominantly positive, supported by 7% organic sales growth, growth across nearly all segments, a 17% EBITA margin, strong Networks performance, improving operating expenses, solid cash generation and progress in AI-enabled products. However, management highlighted a broadly flat RAN market, rising component costs, a likely 2027 transition-year impact, negative Enterprise EBITA, elevated restructuring charges and macroeconomic uncertainty. The number and strength of the reported achievements outweighed the challenges.
Q3-2026 Updates
Positive Updates
Negative Updates
Company Guidance
For Q4, assuming the exchange rates specified in the report, Ericsson expects sales growth in Networks and Cloud Software Services to be broadly similar to the 3-year average quarter-on-quarter seasonality and expects Networks adjusted gross margin to be in the range of 49% to 51%, benefiting from product mix; restructuring charges for 2026 will be elevated. The company said '27 could be such a transition period and is probably somewhat of a transition year as higher component costs flow through, with some impact and a dilution effect significant if action is not taken, while it works to pass on costs, implement structural actions and minimize the impact. Q4 OpEx is expected to show seasonality, and the direction for next year is to continue to offset salary increases; cash flow to net sales remains within the 9% to 12% target.
Telefonaktiebolaget LM Ericsson Financial Statement Overview
Summary
Financials reflect a solid recovery: TTM profitability has improved materially (about 14% operating margin, ~48% gross margin), leverage is manageable (debt-to-equity ~0.41), and cash generation is strong with high FCF conversion (~0.91x of net income). The main constraint is volatility across 2023–2025 (losses and uneven revenue growth) and recent negative FCF growth, which lowers confidence in durability.
Income Statement
74PositiveBalance Sheet
78PositiveCash Flow
82Very Positive| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 231.20B | 222.48B | 259.37B | 249.80B | 274.27B | 244.54B |
| Gross Profit | 109.29B | 107.11B | 116.57B | 99.03B | 114.63B | 106.34B |
| EBITDA | 36.79B | 45.82B | 17.15B | -9.44B | 35.45B | 40.38B |
| Net Income | 19.17B | 26.72B | 20.93M | -25.08B | 18.91B | 23.89B |
Balance Sheet | ||||||
| Total Assets | 301.50B | 279.23B | 298.01B | 309.89B | 348.07B | 306.94B |
| Cash, Cash Equivalents and Short-Term Investments | 58.78B | 56.64B | 56.50B | 44.74B | 46.19B | 66.85B |
| Total Debt | 45.33B | 46.04B | 45.59B | 54.28B | 41.43B | 41.05B |
| Total Liabilities | 190.25B | 168.96B | 204.91B | 212.56B | 217.30B | 200.05B |
| Stockholders Equity | 110.48B | 109.54B | 94.40B | 98.59B | 132.25B | 108.57B |
Cash Flow | ||||||
| Free Cash Flow | 28.51B | 28.50B | 45.96B | 3.68B | 26.65B | 37.26B |
| Operating Cash Flow | 31.76B | 30.98B | 48.40B | 6.81B | 31.17B | 41.12B |
| Investing Cash Flow | -5.56B | -10.75B | -16.69B | -8.26B | -34.74B | -20.93B |
| Financing Cash Flow | -19.99B | -13.37B | -24.97B | 955.17M | -16.09B | -9.80B |
Telefonaktiebolaget LM Ericsson Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ERIC, the sentiment is Positive. The current price of 11.18 is above the 20-day moving average (MA) of 10.25, above the 50-day MA of 9.99, and above the 200-day MA of 10.83, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 69.24 is Neutral, neither overbought nor oversold. The STOCH value of 96.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ERIC.
Telefonaktiebolaget LM Ericsson Risk Analysis
Telefonaktiebolaget LM Ericsson disclosed 43 risk factors in its most recent earnings report. Telefonaktiebolaget LM Ericsson reported the most risks in the "Ability to Sell" category.
Latest Risks Added
3 New RisksTelefonaktiebolaget LM Ericsson Peers Comparison
Overall Rating
- ERIC76Outperform
CIEN75Outperform
UI72Outperform
VIAV68Neutral
CSCO67Neutral
NOK55Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ERIC | 76Outperform | $37.02B | 18.67 | 18.10% | 2.78% | 3.88% | -16.99% |
| CIEN | 75Outperform | $45.48B | 69.42 | 22.82% | ― | 32.57% | 367.53% |
| UI | 72Outperform | $34.11B | 35.53 | 85.62% | 0.60% | 27.22% | 34.82% |
| VIAV | 68Neutral | $7.36B | -233.02 | -3.16% | ― | 40.03% | -193.79% |
| CSCO | 67Neutral | $411.45B | 31.10 | 27.39% | 1.60% | 11.77% | 27.65% |
| Sector * | 61Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
| NOK | 55Neutral | $49.12B | 55.57 | 3.65% | 1.90% | 9.69% | -8.89% |
* Technology Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| ERIC | Telefonaktiebolaget LM Ericsson Class B | 11.18 | 1.12 | 11.14% | |
| CIEN | Ciena Corporation | 320.72 | 131.16 | 69.19% | |
| CSCO | Cisco | 104.51 | 31.41 | 42.98% | |
| NOK | Nokia | 8.56 | 1.51 | 21.37% | |
| UI | Ubiquiti Networks Inc | 563.81 | -206.13 | -26.77% | |
| VIAV | Viavi Solutions Inc | 29.92 | 12.38 | 70.58% |
Telefonaktiebolaget LM Ericsson Corporate Events
Ericsson Reshapes Global Structure, Creates Asia-Pacific Unit and Reorganizes Enterprise Wireless Portfolio
Ericsson announced on October 15, 2026 that it will simplify its group structure and streamline its Executive Team to sharpen customer focus and improve cost efficiencies. The move includes creating a unified Asia-Pacific market area from January 1,...
Ericsson Posts Solid Q3 2026 Sales as Networks Drive Growth Amid Margin Headwinds
On October 15, 2026, Ericsson reported third‑quarter 2026 results showing resilient top‑line performance in a difficult environment, with net sales rising 6% year on year to SEK 59.5 billion and organic growth of 7%, mainly driven by its...
Ericsson Buys Back SEK 746 Million of Shares in October 2026
Ericsson disclosed that it conducted share buybacks of its own Class B shares on Nasdaq Stockholm between October 5 and October 9, 2026, totaling 7,917,288 shares for an aggregate consideration of about SEK 746.4 million. The repurchases were execute...
Ericsson Steps Up SEK 15 Billion Buyback With SEK 872 Million Share Repurchases
Between September 28 and October 2, 2026, Ericsson repurchased 9,370,000 of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 93.088, for a total transaction value of about SEK 872.2 million. The buybacks, executed by Gold...
Ericsson Buys Back 500,000 Shares Under Ongoing SEK 15 Billion Program
Between September 21 and September 25, 2026, Ericsson repurchased 500,000 of its own Class B shares on Nasdaq Stockholm, at a weighted average price of SEK 96.5615 per share for a total consideration of about SEK 48.3 million. The buybacks, executed...
Ericsson Advances SEK 15 Billion Share Buyback Program with September Repurchases
During the period September 14–18, 2026, Ericsson repurchased 500,000 of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 99.5513, for a total transaction value of SEK 49,775,660. The transactions were executed by G...
Ericsson Details September Share Buybacks Under SEK 15 Billion Program
Between September 7 and September 11, 2026, Ericsson repurchased 1,849,987 of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 97.0493, for a total consideration of SEK 179,539,931.56. All transactions were executed by Go...
Ericsson Continues 2026 Share Buyback, Repurchasing 2.85 Million Shares
Ericsson, the Swedish telecommunications equipment giant, is a key provider of mobile communication and programmable network solutions to service providers and enterprises around the world. Its technologies underpin connectivity for billions of users...
Ericsson Steps Up SEK 15 Billion Share Buyback With Late-August Repurchases
Between August 24 and August 28, 2026, Ericsson repurchased 2,150,000 of its own Class B shares on Nasdaq Stockholm as part of a previously announced buyback program. The transactions, executed by Goldman Sachs Bank Europe SE, had a total value of SE...
Ericsson Details August 17–21 Buybacks Under SEK 15 Billion Share Repurchase Program
Between August 17 and August 21, 2026, Telefonaktiebolaget LM Ericsson repurchased 2,999,360 of its Class B shares on Nasdaq Stockholm at a weighted average price of SEK 96.6970, for a total transaction value of about SEK 290 million. The buybacks we...
Ericsson Buys Back 2.5 Million Shares as Part of SEK 15 Billion Program
During the period August 10–14, 2026, Ericsson repurchased 2.5 million of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 96.70, for a total transaction value of about SEK 241.8 million. The trades, executed by Gol...
Ericsson Repurchases 4 Million Shares Under Ongoing SEK 15 Billion Buyback Program
Telefonaktiebolaget LM Ericsson disclosed that between August 3 and August 7, 2026, it repurchased 4 million of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 96.87, for a total consideration of about SEK 387.5 million....
Ericsson Advances SEK 15 Billion Share Buyback with Late-July Repurchases
During the period July 27–31, 2026, Ericsson repurchased 3.5 million of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 94.6474, for a total transaction value of SEK 331,265,750. The buybacks were executed by Goldm...
Ericsson Buys Back 8.5 Million Shares in Ongoing SEK 15 Billion Program
Telefonaktiebolaget LM Ericsson disclosed that between July 20 and July 24, 2026 it repurchased 8,515,000 of its own Class B shares on Nasdaq Stockholm. The weighted average purchase price was SEK 93.47 per share, corresponding to a total transaction...
Ericsson Names Christophe Van de Weyer to Lead Global Communications Platform and Vonage
Ericsson announced on July 21, 2026, that Christophe Van de Weyer, currently Head of Business Unit API at Vonage, has been appointed Head of Business Area Global Communications Platform and CEO of Vonage, and will join Ericsson’s Executive Team...
Ericsson Advances SEK 15 Billion Share Buyback with July Repurchases
Between July 13 and July 17, 2026, Ericsson repurchased 9,595,000 of its own Class B shares on Nasdaq Stockholm at a weighted average price of SEK 98.48, for a total consideration of approximately SEK 944.9 million. The transactions were executed by...
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.
Date of analysis: Oct 18, 2026