In the latest trading session, Ericsson (ERIC) closed at $9.03, marking a -1.74% move from the previous day. This change was narrower than the S&P 500's 2.59% loss on the day. Meanwhile, the Dow lost 2.72%, and the Nasdaq, a tech-heavy index, lost 2.19%.
Wall Street will be looking for positivity from ERIC as it approaches its next earnings report date. This is expected to be July 17, 2020. In that report, analysts expect ERIC to post earnings of $0.07 per share. This would mark year-over-year growth of 16.67%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.59 billion, down 3.74% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.52 per share and revenue of $24.72 billion, which would represent changes of +372.73% and +3.01%, respectively, from the prior year.
Any recent changes to analyst estimates for ERIC should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. 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 has moved 2.48% higher within the past month. ERIC is currently a Zacks Rank #2 (Buy).
In terms of valuation, ERIC is currently trading at a Forward P/E ratio of 17.76. Its industry sports an average Forward P/E of 23.42, so we one might conclude that ERIC is trading at a discount comparatively.
It is also worth noting that ERIC currently has a PEG ratio of 0.68. 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. Wireless Equipment stocks are, on average, holding a PEG ratio of 1.99 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 68, which puts it in the top 27% 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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