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

Zacks Equity Research
Malibu Boats (MBUU) closed at $36.27 in the latest trading session, marking a -1.09% move from the prior day.

In the latest trading session, Ericsson (ERIC) closed at $9.81, marking a -0.1% move from the previous day. This change lagged the S&P 500's daily gain of 1.09%. At the same time, the Dow added 0.84%, and the tech-heavy Nasdaq gained 1.42%.

Coming into today, shares of the telecommunications equipment provider had gained 6.51% in the past month. In that same time, the Computer and Technology sector gained 4.97%, while the S&P 500 gained 1.18%.

ERIC will be looking to display strength as it nears its next earnings release, which is expected to be April 17, 2019. The company is expected to report EPS of $0.04, up 300% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.26 billion, down 1.72% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.32 per share and revenue of $23.26 billion, which would represent changes of +966.67% and -5.37%, respectively, from the prior year.

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. 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 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ERIC currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, ERIC is holding a Forward P/E ratio of 30.93. For comparison, its industry has an average Forward P/E of 23.22, which means ERIC is trading at a premium to the group.

We can also see that ERIC currently has a PEG ratio of 0.74. 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. The Wireless Equipment was holding an average PEG ratio of 2.17 at yesterday's closing price.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% 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.

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

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