Ericsson Lm Telephone Co (ERIC)

Price$10.10Cached quoteAs of 2026-09-05 22:38 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because cash returns are attractive, but current earnings are weakening.

At the observed market price, Ericsson’s equity value is about SEK 331 billion. That equals roughly 11.5 times FY2025 diluted earnings of SEK 8.51 per share. Using the supplied cash-flow history, operating cash of SEK 33.0 billion less SEK 2.6 billion of capital spending gives about SEK 30.3 billion of cash after those investments, or roughly 11 times market value. However, 2025 earnings included a SEK 7.6 billion iconectiv disposal gain, while 2026 earnings have slowed. That balance supports a Fair-priced verdict rather than a clear bargain.

Big pictureEricsson has rebuilt profitability, yet sales remain below earlier peaks and demand still moves in cycles.

Revenue was SEK 236.7 billion in 2025, down about 13% from 2022, but gross margin improved to 47.6% from 41.7%. Operating income recovered to SEK 38.6 billion after a SEK 20.3 billion loss in 2023, though the iconectiv sale boosted 2025 results. In the first half of 2026, reported sales fell 8% and diluted earnings were SEK 1.48 per share. Second-quarter adjusted gross margin still held at 48.4%. The evidence says efficiency has improved, but earnings remain tied to telecom spending cycles and one-off items.

Business strengthA solid balance sheet and better margins give Ericsson room to invest and return capital.

At year-end 2025, supplied figures show SEK 43.9 billion of cash against SEK 32.7 billion of debt, plus SEK 32.6 billion more current assets than current liabilities. That lowers financial risk, although goodwill of SEK 46.9 billion equals about 43% of equity. Share count rose about 1.1% from 2022 to 2025 while stock compensation reached SEK 5.4 billion in 2025. The current buyback authorization is up to SEK 15 billion, about 4.5% of market value, and most repurchased shares are intended for cancellation.

What could change the storySustained margin resilience could support upside, while component inflation or weaker network spending would undermine it.

The bull case is that Ericsson keeps adjusted gross margin near 48% and converts its stronger cost base into steady cash generation as 5G Advanced, artificial-intelligence network features, and new operator spending expand. The bear case is more immediate: management warned that memory and other component costs are rising, and network rollout mix may pressure third-quarter margins. Inference: the current valuation works if normalized earnings return to roughly SEK 7–9 per share and annual cash generation stays in the mid-SEK-20-billion range or better. Persistent results below that range would make the shares look expensive.

AI: News

Cost warning hits sharesSecond-quarter results beat core profit expectations, but rising component costs triggered a sharp selloff.

On July 14, Ericsson reported second-quarter sales of SEK 52.7 billion, down 6% year over year, while adjusted operating profit before amortization was SEK 6.9 billion and adjusted gross margin was 48.4%. Free cash flow before acquisitions and disposals fell to SEK 0.4 billion. Management also warned that memory-chip inflation linked partly to artificial-intelligence demand could weigh on margins. Reuters reported the shares fell nearly 12%. The warning offers a plausible explanation for the selloff, though timing alone cannot prove full causation.

CEO succession announcedEricsson chose an experienced internal successor, reducing disruption risk but creating a new execution test.

On June 16, Ericsson said Börje Ekholm will leave the chief executive role on September 30 and Per Narvinger, then head of Networks, will take over October 1. Reuters reported a roughly 0.6% share rise after the announcement, a modest reaction. Narvinger has worked at Ericsson since 1997 and has led both Networks and Cloud Software and Services. The succession preserves internal continuity, but investors now must judge whether the margin recovery and capital discipline built under Ekholm can persist through a leadership handoff.

Buybacks keep reducing sharesEricsson continued a large buyback program that can raise each remaining share’s claim on future profits.

Ericsson disclosed on August 24 that it repurchased about 3.0 million Class B shares during the prior week for roughly SEK 290 million. Treasury holdings reached about 100.7 million shares. These purchases are part of a program authorizing up to SEK 15 billion through March 2027, with most shares intended for cancellation rather than permanent treasury use. That can offset recent dilution and improve per-share economics if operating cash remains healthy. No reliable same-day market reaction was established for this weekly update.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	kr236.68B	kr247.88B	kr263.35B	kr271.55B	kr232.31B	kr232.39B	kr227.22B	kr210.84B	kr205.38B	kr220.32B	kr246.92B
Gross profit	kr112.67B	kr109.36B	kr101.60B	kr113.30B	kr100.75B	kr93.72B	kr84.82B	kr68.20B	kr47.93B	kr65.25B	kr85.82B
Gross margin	47.60%	44.12%	38.58%	41.72%	43.37%	40.33%	37.33%	32.35%	23.34%	29.62%	34.76%
Research & development	kr48.85B	kr53.51B	kr50.66B	kr47.30B	kr42.07B	kr39.71B	kr38.81B	kr38.91B	kr37.89B	kr31.63B	kr34.84B
Operating expenses	kr82.30B	kr105.44B	kr90.19B	kr83.03B	kr69.07B	kr66.28B	kr64.22B	kr66.85B	kr70.56B	kr60.50B	kr64.13B
Operating income	kr38.63B	kr4.31B	−kr20.33B	kr27.02B	kr31.78B	kr27.81B	kr10.56B	kr1.24B	−kr34.74B	kr5.19B	kr21.80B
Operating margin	16.32%	1.74%	−7.72%	9.95%	13.68%	11.97%	4.65%	0.59%	−16.92%	2.35%	8.83%
EBITDA	kr47.54B	kr14.33B	−kr9.17B	kr37.16B	kr40.24B	kr35.79B	kr19.16B	kr8.46B	−kr26.29B	kr14.07B	kr32.03B
EBITDA margin	20.09%	5.78%	−3.48%	13.69%	17.32%	15.40%	8.43%	4.01%	−12.80%	6.39%	12.97%
Net income	kr28.71B	kr374.0M	−kr26.10B	kr19.11B	kr22.98B	kr17.62B	kr1.84B	−kr6.28B	−kr32.43B	kr1.01B	kr13.67B
Net profit margin	12.13%	0.15%	−9.91%	7.04%	9.89%	7.58%	0.81%	−2.98%	−15.79%	0.46%	5.54%
Basic EPSper basic share	SEK 8.53	SEK 0.01	-SEK 7.94	SEK 5.62	SEK 6.82	SEK 5.26	SEK 0.67	-SEK 1.98	-SEK 9.94	SEK 0.26	SEK 4.17
Diluted EPSper diluted share	SEK 8.51	SEK 0.01	-SEK 7.94	SEK 5.62	SEK 6.81	SEK 5.26	SEK 0.67	-SEK 1.98	-SEK 9.94	SEK 0.25	SEK 4.13

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of ERIC
Holder	Shares held
HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC	68.7M
ACADIAN ASSET MANAGEMENT LLC	62.03M
PRIMECAP MANAGEMENT CO/CA/	41.61M
GOLDMAN SACHS GROUP INC	15.28M
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	15.18M
MORGAN STANLEY	13.17M
BANK OF AMERICA CORP /DE/	8.14M
UBS Group AG	6.06M
AMERIPRISE FINANCIAL INC	5.21M
SEI INVESTMENTS CO	5.17M
FMR LLC	5.05M
LAZARD ASSET MANAGEMENT LLC	4.49M
RENAISSANCE TECHNOLOGIES LLC	4.08M
NEW YORK STATE COMMON RETIREMENT FUND	3.11M
CITIGROUP INC	2.88M
MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd.	2.71M
BlackRock, Inc.	2.71M
AMERICAN CENTURY COMPANIES INC	2.64M
JPMORGAN CHASE & CO	2.21M
Russell Investments Group, Ltd.	1.94M

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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Ericsson Lm Telephone Co (ERIC)

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