Ericsson (ERIC) Outpaces Stock Market Gains: What You Should Know
Ericsson (ERIC) closed the most recent trading day at $5.81, moving +1.57% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 1.37%. Meanwhile, the Dow gained 1.4%, and the Nasdaq, a tech-heavy index, added 1.38%.
Shares of the telecommunications equipment provider witnessed a gain of 19.17% over the previous month, beating the performance of the Computer and Technology sector with its gain of 4.65% and the S&P 500's gain of 5.37%.
Market participants will be closely following the financial results of Ericsson in its upcoming release. The company's earnings per share (EPS) are projected to be $0.14, reflecting a 30% decrease from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $7.04 billion, reflecting a 12.28% fall from the equivalent quarter last year.
ERIC's full-year Zacks Consensus Estimates are calling for earnings of $0.34 per share and revenue of $24.95 billion. These results would represent year-over-year changes of -44.26% and -6.68%, respectively.
Any recent changes to analyst estimates for Ericsson should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.75% upward. Currently, Ericsson is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, Ericsson is presently being traded at a Forward P/E ratio of 16.95. This denotes a premium relative to the industry's average Forward P/E of 13.9.
It is also worth noting that ERIC currently has a PEG ratio of 11.22. 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 industry currently had an average PEG ratio of 1.25 as of yesterday's close.
The Wireless Equipment industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 62, finds itself in the top 25% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Ericsson (ERIC) : Free Stock Analysis Report
