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

Zacks Equity Research

In the latest trading session, Ericsson (ERIC) closed at $11.40, marking a -1.13% move from the previous day. This move lagged the S&P 500's daily gain of 0.34%. At the same time, the Dow added 0.69%, and the tech-heavy Nasdaq gained 0.42%.

Prior to today's trading, shares of the telecommunications equipment provider had lost 0.69% over the past month. This has lagged the Computer and Technology sector's gain of 4.96% and the S&P 500's gain of 4.3% in that time.

ERIC will be looking to display strength as it nears its next earnings release. On that day, ERIC is projected to report earnings of $0.17 per share, which would represent year-over-year growth of 189.47%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.41 billion, up 7.61% from the year-ago period.

ERIC's full-year Zacks Consensus Estimates are calling for earnings of $0.57 per share and revenue of $25.11 billion. These results would represent year-over-year changes of +418.18% and +4.63%, respectively.

Any recent changes to analyst estimates for ERIC should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. 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. Within the past 30 days, our consensus EPS projection has moved 1.35% higher. ERIC currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that ERIC has a Forward P/E ratio of 20.41 right now. For comparison, its industry has an average Forward P/E of 20.32, which means ERIC is trading at a premium to the group.

It is also worth noting that ERIC currently has a PEG ratio of 0.78. 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. ERIC's industry had an average PEG ratio of 1.91 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 124, which puts it in the top 49% 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.

To follow ERIC in the coming trading sessions, be sure to utilize Zacks.com.


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