Ericsson (ERIC) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Ericsson (ERIC) closed at $8.90, marking a +0.91% move from the previous day. This move outpaced the S&P 500's daily gain of 0.49%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.67%.

Prior to today's trading, shares of the telecommunications equipment provider had lost 2.76% over the past month. This has lagged the Computer and Technology sector's gain of 5.11% and the S&P 500's gain of 3.03% in that time.

Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. This is expected to be January 24, 2020. The company is expected to report EPS of $0.16, up 277.78% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.95 billion, down 1.41% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for ERIC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. ERIC is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ERIC is holding a Forward P/E ratio of 16.26. For comparison, its industry has an average Forward P/E of 26.51, which means ERIC is trading at a discount to the group.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 163, which puts it in the bottom 37% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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