Telefonaktiebolaget LM Ericsson
Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions to communications service providers, enterprises, and the public sector in the Americas, Europe, the Middle East, Africa, Northeast Asia, Southeast Asia, Oceania, and India. It operates th…
Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions to communications service providers, enterprises, and the public sector in the Americas, Europe, the Middle East, Africa, Northeast Asia, Southeast Asia, Oceania, and India. It operates through Networks; Cloud Software and Services; Enterprise; and Other segments. The Networks segment offers hardware, software, and service offerings for intelligent, reliable and flexible 5G networks. This segment also provides energy-efficient RAN with an AI-native software architecture deployable on Ericsson silicon and third-party CPUs/GPUs; transport networks; and active/ passive antennas, as well as deployment and lifecycle management services. The Cloud Software and Services segment provides core networks, network management, business and operations support systems, and network operations delivered as managed services, including secure data and voice connectivity, service monetization and orchestration tools, and network management services. The Enterprise segment offers intelligent networking and advanced communications software solutions comprising global communications platform, wireless wide area networks (WWAN), and private 5G networks. The Other segment includes RedBee Media that prepares and distributes live and on-demand video services for broadcasters, sports leagues, and communications service providers. The company has a strategic collaboration with T-Mobile US, Inc for the development of AI-native Scheduler with Link Adaptation software. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.Priced within the modelled range
5-year outlook: Not shown because confidence is low: Earnings-based DCF disagrees strongly.
Other models: SEK 63.23–149.48 (median 116.19). The recommended value is in line with them.
Why: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Details and the full model are below.
Market price within modeled range
Free-cash-flow DCF using TTM through 30 Sep 2026 reported free cash flow, with cash, debt, and shares from the latest report. Base assumptions are 2% growth, 3.25% terminal growth, and 11.5% discount. Low/high cases vary growth by 2 and terminal growth/discount by 1 percentage point; this illustrative range is not a statistical confidence interval or investment advice.
Assumptions: growth 2%, discount rate 11.50%, terminal growth 3.25% (sector defaults). See a worked example.
Blended growth assumption: 2.0% (sector default 8.5%, own revenue history -4.5%, analyst revenue consensus 1.7%).
Analyst consensus expects revenue growth of 1.7% a year; the growth assumption used is 2.0%.
Adjust assumptions
Why this model: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Compare models- Recommended: Free-cash-flow DCF — SEK 110.47 (+8.0%)
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EPS-based Gordon proxy
— SEK 63.23 (-38.2%)
Not used: Treats all earnings as if paid out and ignores the cash kept for reinvestment, so it overstates value for companies that retain most profit.
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DCF (trailing free cash flow)
— SEK 110.47 (+8.0%)
Not used: Not chosen: Free-cash-flow DCF ranks ahead of it for this company.
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FCFF (steady state)
— SEK 116.19 (+13.6%)
Not used: Assumes only the long-run terminal growth rate from today, so it ignores the near-term growth expected.
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EV/EBITDA (12x)
— SEK 149.48 (+46.2%)
Not used: Used only when free cash flow is far below earnings even after averaging three years; a fixed 12x multiple also ignores sector differences.
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Fade DCF (10-year growth fade)
— SEK 110.72 (+8.3%)
Not used: An alternative growth path (fading over 10 years) shown for comparison; the automatic choice does not use it.
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EV/Sales (Rule of 40)
— SEK 274.57 (+168.5%)
Not used: Used only when cash-flow models land far below the price; here they do not.
| Bear SEK 85.57 | -19.5% |
| Base SEK 110.47 | 7.4% |
| Bull SEK 151.90 | 32.7% |
Margin = (value − price) / value, so it is measured against the value and reads lower than the upside to value, which is measured against the price. Positive means the price is below that case.
At SEK 102.25 the market implies about this annual free-cash-flow growth for 5 years (terminal 3.3%, discount 11.5%).
Compare: the market implies 0.1% a year, this model assumes 2.0%. The model is more optimistic than the price, which is why it reads as undervalued.
How the Free-cash-flow DCF value changes with growth (rows) and discount rate (columns). Green cells are above the current price.
| Growth \ Discount | 9.5% | 10.5% | 11.5% | 12.5% | 13.5% |
|---|---|---|---|---|---|
| -2.0% | 121.56 | 105.78 | 93.81 | 84.42 | 76.85 |
| 0.0% | 132.48 | 115.05 | 101.83 | 91.47 | 83.12 |
| 2.0% | 144.25 | 125.03 | 110.47 | 99.05 | 89.86 |
| 4.0% | 156.92 | 135.77 | 119.75 | 107.20 | 97.09 |
| 6.0% | 170.55 | 147.31 | 129.72 | 115.94 | 104.85 |
Track record: see the methodology page for how this model has performed historically, including its limits. Treat it as a screen, not a forecast.
Price history and fair value
No chartable saved daily price history is available for this range. The chart uses stored EODHD prices only and will appear after history is saved.
More detail: quality, peers, price history, dividends and financials
Quality score: 70 / 100
Five equal checks on reported history: profitability, cash generation, revenue growth, balance sheet and margins. It describes business quality, not whether the price is attractive.
| Profitability | 4 of 5 years profitable | 16 / 20 |
| Cash generation | free cash flow positive in 5 of 5 years | 20 / 20 |
| Growth | revenue -4.0% a year | 4 / 20 |
| Balance sheet | net cash | 20 / 20 |
| Margins | EBITDA margin 17% | 10 / 20 |
Peers in Information Technology
Same-sector companies with a valuation, most undervalued first. Compare the margin of safety, yield and quality score side by side.
| Company | Price | Margin of safety | P/E | P/B | Yield | Quality |
|---|---|---|---|---|---|---|
| ERIC-B.ST (this company) | SEK 102.25 | 7.4% | 17.4 | 3.0 | 2.9% | 70 |
| SMCI Supermicro | USD 28.56 | 48.1% | 8.9 | 1.4 | – | 68 |
| ADBE Adobe Inc. | USD 240.53 | 43.9% | 13.0 | 8.1 | – | 100 |
| SNDK Sandisk | USD 873.36 | 39.5% | 6.9 | 7.4 | – | 76 |
| IT Gartner | USD 190.76 | 38.1% | 12.8 | – | – | 92 |
| INTU Intuit | USD 346.10 | 33.6% | 20.6 | 5.0 | 1.4% | 100 |
| HPQ HP Inc. | USD 29.33 | 31.9% | 11.1 | – | 4.0% | 64 |
| GIB-A.TO CGI Inc. | CAD 113.61 | 28.1% | 13.7 | 2.3 | 0.6% | 90 |
| FSLR First Solar | USD 196.17 | 25.8% | 11.4 | 1.9 | – | 84 |
| Peer median | 12.1 | 3.6 | ||||
Dividends
Paid in the last 12 months: SEK 3.00 per share · yield 2.93% at the current price.
| Year | Dividends per share |
|---|---|
| 2026 (so far) | 3.000 |
| 2025 | 2.850 |
| 2024 | 2.700 |
| 2023 | 2.700 |
| 2022 | 2.500 |
| 2021 | 2.000 |
Trailing 12-month financials
TTM through 30 Sep 2026 · quarterly EODHD data · data downloaded 06 Nov 2026 12:55
| Revenue | SEK 230,786,000,000 |
|---|---|
| EBITDA | SEK 39,713,000,000 |
| EBIT | SEK 33,158,000,000 |
| Net income | SEK 19,303,000,000 |
| Free cash flow | SEK 29,359,000,000 |
| Capital expenditures | SEK 2,953,000,000 |
| Debt | SEK 45,334,000,000 |
| Cash | SEK 58,784,000,000 |
| Working capital | SEK 21,619,000,000 |
| Shares outstanding | 3,278,000,000 |
| Reported dividends per share | SEK 2.9808 |