Telefonaktiebolaget LM Ericsson (publ) (ERIC) is listed on NASDAQ and operates in the Communication Equipment industry (Technology sector).
Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides communication infrastructure, services, and software solutions to the telecom and other sectors. It operates through four segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment offers radio access network solutions for various network spectrum bands, including integrated high-performing hardware and software. This segment also provides integrated antenna and transport solutions; and a range of service portfolio covering network deployment and support. The Digital Services segment offers software-based solutions for business support systems, operational support systems, communication services, core networks, and cloud infrastructure. The Managed Services segment provides networks and IT managed, network design and optimization, and application development and maintenance services to telecom operators. The Emerging Business and Other segment includes emerging businesses comprising Internet of Things; iconectiv; Cradlepoint that offers wireless edge WAN 4G and 5G enterprise solutions; and Red Bee Media, MediaKind, and other new businesses. It operates in North America, Europe and Latin America, the Middle East and Africa, South East Asia, Oceania, India, North East Asia, and internationally. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.
| Rating | Analysts |
|---|---|
| Strong Buy | 0 |
| Buy | 15 |
| Hold | 23 |
| Sell | 2 |
| Strong Sell | 0 |
Telefonaktiebolaget LM Ericsson (publ) is a technology company specializing in communication infrastructure, services, and software solutions. It operates through four main segments: Networks, Digital Services, Managed Services, and Emerging Business and Other. The Networks segment provides radio access network solutions, integrated antenna and transport solutions, and a comprehensive service portfolio for network deployment and support. The Digital Services segment focuses on software-based solutions for business and operational support systems, communication services, core networks, and cloud infrastructure. Managed Services offers network and IT management, network design and optimization, and application development and maintenance services for telecom operators. The Emerging Business and Other segment includes ventures in the Internet of Things, wireless edge WAN solutions through Cradlepoint, and media services through Red Bee Media and MediaKind. Ericsson operates globally, with a presence in North America, Europe, Latin America, the Middle East, Africa, South East Asia, Oceania, India, and North East Asia. Founded in 1876, the company is headquartered in Stockholm, Sweden.
Over the past three fiscal years, the company has demonstrated a significant turnaround in profitability. Starting with a negative net margin of -10.0% in 2023, the company improved to a positive 12.0% by 2025, marking a 22.1pp increase. This shift was supported by consistent gross margin expansion, which increased by 8.5pp to 48.1%, and an operating margin that rose by 7.0pp to 13.8%. Despite an inconsistent revenue trajectory, which declined at a CAGR of -5.6% from SEK 249.8 billion in 2023 to SEK 222.5 billion in 2025, the company managed to enhance its earnings per share from -7.53 to 8.0, reflecting a consistent increase. Cash generation also saw a remarkable improvement, with operating cash flow growing at a CAGR of 113.3% to SEK 30.98 billion, and free cash flow surging at a CAGR of 178.3% to SEK 28.50 billion, resulting in a robust FCF margin of 12.8%. The company's net debt position improved significantly, decreasing from SEK 19.12 billion to SEK 2.11 billion, indicating strengthened financial health. Additionally, the return on invested capital (ROIC) consistently increased to 29.4%, underscoring enhanced capital efficiency. Despite a slight increase in share count by 0.36%, the company's strategic focus on profitability and cash flow generation has clearly paid off, as evidenced by the strong cash conversion ratio of 1.16, indicating that earnings are well-supported by actual cash flows.
Ericsson's recent developments are highlighted by its Q1 2026 financial results, which showed a 6% year-over-year increase in organic sales, driven by strong performance in its Networks segment. Despite this growth, the company faced currency headwinds that impacted its margins. The earnings report, released on April 16, matched analyst estimates, although revenues declined compared to the previous year. In response to these results, some analysts have maintained a neutral sentiment, noting the potential for long-term upside contingent on cost management and execution. Additionally, Ericsson has initiated a share buyback program, with plans to repurchase up to 10% of its shares, starting April 23, 2026, and concluding by March 31, 2027. This move is seen as a strategic effort to enhance shareholder value. Furthermore, Ericsson's stock recently crossed above its 200-day moving average, with analysts assigning an "equal weight" rating and a price target of $11. On the partnership front, Ericsson's subsidiary Vonage has teamed up with Girls Who Code to support the next generation of developers, reflecting the company's ongoing commitment to strategic collaborations.