Telefonaktiebolaget LM Ericsson (publ), (ERIC) Fair Value & Analysis

Technology · US · Market cap $37.8B

A solid business, screening 57% undervalued on our models.

What matters now

• The rarer combination: high quality (74/100) AND below fair value. That earns a closer look rather than a quick verdict.
• The price is below even our cautious bear case ($11.54). The market is more pessimistic than our downside scenario.

Price vs Fair Value (5 years)

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Jul 15, 2026.

How to read this chart

60‑month range $3.98 – $13.74 · fair‑value band $11.54 – $20.12 · the $10.15 price screens below the $15.96 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Jul 15, 2026.

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Analysis

Telefonaktiebolaget LM Ericsson (publ), (ERIC) currently trades at $10.15, while our model-based Fair Value estimate is $15.96, implying the stock looks roughly 57.2% undervalued today. The Quality Score stands at 74/100 (solid quality), in the Technology sector. Bull case: trading below our estimate, it may offer upside if the fundamentals hold. Bear case: a low price can be a value trap when quality is weak or the data is thin (evidence: high), always confirm before acting.

Over the trailing twelve months, Telefonaktiebolaget LM Ericsson (publ), generated revenue of $240B at a net margin of 10.9%. Revenue declined 10.3% year over year. It earns a return on equity of 27.0%. Net debt stands at $2.1B. Fundamentals as of Jul 15, 2026

Our scenario range runs from $11.54 (bear case) to $20.12 (bull case); at $10.15, the current price sits below that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 26% below its 52-week high and 46% above its 52-week low, currently below its 200-day average. For context, the median of 10 Technology peers we cover trades at -64% fair-value upside, at 57%, ERIC screens cheaper than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Widest divergence: Multiples ($148.62) versus Asset-Based ($24.01). Highest evidence: Growth DCF (80).

Key figures & financial health

Quality Score breakdown

About the company

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.

Full company description

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.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

Telefonaktiebolaget LM Ericsson (publ), reported revenue of $222B in FY2025 versus $245B in FY2021, a compound −2.3%/yr. Reported net income was $26.7B in FY2025, compounding +2.8%/yr from FY2021.

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Peer Group

Communication Equipment · 290 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Valuation Multiples vs Communication Equipment median · lower = cheaper

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

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Frequently asked questions

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.