In the latest trading session, Ericsson (ERIC) closed at $12.20, marking a +1.33% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.71%. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 0.95%.
Prior to today's trading, shares of the telecommunications equipment provider had lost 3.45% over the past month. This has lagged the Computer and Technology sector's gain of 0.85% and the S&P 500's gain of 0.17% in that time.
ERIC will be looking to display strength as it nears its next earnings release, which is expected to be January 29, 2021. On that day, ERIC is projected to report earnings of $0.21 per share, which would represent year-over-year growth of 40%. Our most recent consensus estimate is calling for quarterly revenue of $7.42 billion, up 7.44% from the year-ago period.
Investors might also notice 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.98% lower. ERIC is holding a Zacks Rank of #4 (Sell) right now.
In terms of valuation, ERIC is currently trading at a Forward P/E ratio of 15.89. For comparison, its industry has an average Forward P/E of 18.93, which means ERIC is trading at a discount to the group.
Investors should also note that ERIC has a PEG ratio of 0.55 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Wireless Equipment stocks are, on average, holding a PEG ratio of 2.1 based on yesterday's closing prices.
The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 55, which puts it in the top 22% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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