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Ericsson (ERIC) Gains But Lags Market: What You Should Know

Ericsson (ERIC) closed the most recent trading day at $7.43, moving +0.04% from the previous trading session. This move lagged the S&P 500's daily gain of 1.15%. At the same time, the Dow added 2.39%, and the tech-heavy Nasdaq lost 0.45%.

Prior to today's trading, shares of the telecommunications equipment provider had lost 10.66% over the past month. This has was narrower than the Computer and Technology sector's loss of 18.62% and the S&P 500's loss of 24.07% in that time.

Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. The company is expected to report EPS of $0.07, down 22.22% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.62 billion, up 5.31% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.52 per share and revenue of $24.53 billion. These totals would mark changes of +372.73% and +2.19%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ERIC. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 1.42% lower within the past month. ERIC currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ERIC has a Forward P/E ratio of 14.35 right now. This represents a discount compared to its industry's average Forward P/E of 15.3.

We can also see that ERIC currently has a PEG ratio of 0.81. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ERIC's industry had an average PEG ratio of 1.4 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 38, which puts it in the top 15% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ERIC in the coming trading sessions, be sure to utilize Zacks.com.


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