Ericsson (ERIC) Outpaces Stock Market Gains: What You Should Know
Ericsson (ERIC) closed at $13.04 in the latest trading session, marking a +0.77% move from the prior day. This change outpaced the S&P 500's 0.34% gain on the day.
Prior to today's trading, shares of the telecommunications equipment provider had lost 1.52% over the past month. This has lagged the Computer and Technology sector's gain of 5.91% and the S&P 500's gain of 2.71% in that time.
Investors will be hoping for strength from ERIC as it approaches its next earnings release, which is expected to be July 16, 2021. In that report, analysts expect ERIC to post earnings of $0.14 per share. This would mark year-over-year growth of 40%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.65 billion, up 15.83% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.78 per share and revenue of $28.53 billion. These totals would mark changes of +21.88% and +12.07%, 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ERIC is currently a Zacks Rank #3 (Hold).
Looking at its valuation, ERIC is holding a Forward P/E ratio of 16.7. For comparison, its industry has an average Forward P/E of 18.43, which means ERIC is trading at a discount to the group.
Also, we should mention that ERIC has a PEG ratio of 1.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless Equipment was holding an average PEG ratio of 2.81 at yesterday's closing price.
The Wireless Equipment industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 239, putting it in the bottom 6% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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