Telefonaktiebolaget LM Ericsson (publ) (ERIC) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-21.1%

$8.79

vs $11.15 price

Levered DCF

$13.81

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

2.31

Grey zone

Rating

A-

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	11.11×	14,860.76×	-8.43×	10.7×	13.68×	20.94×	127.38×	-38.4×
P/B	2.71×	3.15×	2.14×	1.53×	3.01×	3.77×	3.4×	2.93×
P/S	1.33×	1.15×	0.85×	0.74×	1.34×	1.58×	1.25×	1.19×
EV / EBITDA	6.52×	17.42×	-24.4×	5.82×	7.78×	9.83×	13.99×	47.83×
Gross margin	48.1%	44.9%	39.6%	41.8%	43.5%	40.6%	37.5%	35.2%
Operating margin	13.8%	3.6%	6.8%	11.3%	14.0%	12.7%	9.7%	4.9%
Net margin	12.0%	0.0%	-10.0%	6.9%	9.8%	7.5%	1.0%	-3.1%
Current ratio	1.29×	1.17×	1.2×	1.19×	1.38×	1.31×	1.32×	1.45×
Debt / equity	0.42×	0.48×	0.55×	0.31×	0.38×	0.46×	0.58×	0.38×
Interest coverage	10.73×	2.53×	5.17×	15.74×	18.74×	13.32×	9.24×	5.16×
Dividend yield	3.0%	3.2%	4.0%	4.2%	2.2%	1.6%	1.6%	1.4%
Payout ratio	33.6%	44984.3%	-34.0%	44.5%	30.4%	34.3%	200.2%	-52.5%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	24.4%	0.0%	-25.4%	14.3%	22.0%	18.0%	2.7%	-7.7%
Return on invested capital	13.3%	0.8%	8.5%	11.3%	14.1%	10.1%	2.6%	6.5%
Return on assets	9.6%	0.0%	-8.1%	5.4%	7.8%	5.7%	0.8%	-2.4%
Free cash flow yield	9.6%	15.5%	1.7%	13.2%	11.4%	6.7%	4.1%	2.1%
Earnings yield	9.0%	0.0%	-11.9%	9.3%	7.3%	4.8%	0.8%	-2.6%
Enterprise value	$298.7B	$298.8B	$230.4B	$206.2B	$314.2B	$322.2B	$274.3B	$253.7B
Net debt / EBITDA	0.05×	0.1×	-2.02×	0.11×	-0.32×	-0.13×	0.12×	-1.01×
Cash conversion cycle (days)	95	88	125	119	104	111	115	142