Stock

Telefonaktiebolaget LM Ericsson (publ)

ERIC
71
Communication Equipment · Technology
Price
$10.55
-0.16 (-1.49%)
Market Cap
$35.30B
Exchange
NASDAQ
Winston Score
71
Winston is happy
A high-quality business with solid fundamentals.
Data as of Oct 18, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Strong
21/30
Growth
Good
12/20
Cash Flow
Exceptional
9/10
Stability
Strong
8/10
Valuation
Strong
7/10
Ownership
Good
10/15
Dividends
Strong
4/5

71 of 100 counted points = Winston Score 71.

§Winston Score History

The full picture

Ericsson is a Swedish company that builds the equipment and software that powers mobile phone networks. Its main products include radio antennas, base stations, and network management software sold to large telecom companies like AT&T, Verizon, and T-Mobile. Ericsson is one of only three major global suppliers of 5G network infrastructure, alongside Nokia and Huawei.

The company earns money by selling hardware to telecom operators and charging ongoing fees for software licenses and managed services. Ericsson operates worldwide, with significant revenue coming from North America, Europe, and parts of Asia, and it generates roughly $25 billion in annual sales. Its competitive position rests on deep technical expertise and long-standing customer relationships, but it faces constant pressure from Huawei's lower-cost offerings in many markets. The key growth driver is continued global 5G network buildout, though slowing carrier spending and geopolitical trade tensions remain meaningful risks to future revenue.

Share count broadly stable

+0.3% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 3.33B (2021) → 3.34B (2025)

Score breakdown

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Quality

Profit per sale
Gross Margin
48.4%
Healthy — 48.4% gross margin
Profit after running costs
Operating Margin
12.3%
Healthy — 12.3% operating margin
Return on the money invested
ROCE
22.9%
Exceptional — 22.9% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth
Sales YoY
-5.2%
Shrinking sales (-5.2% YoY)
Profit growth
EPS YoY
+45.2%
Earnings growing fast (+45.2% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is
EPS Consistency
6/8 quarters
Earnings grew in most of the last 8 quarters

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Cash Flow

Profit that turns into cash
Cash Conversion
135%
Turns 135% of profit into real cash
Spare cash per sale
FCF Margin
13.3%
Converts sales into free cash efficiently (13.3%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

What it owes vs what it owns
Debt / Equity
0.32
Conservative — low debt load (0.32)
Covers its interest
Interest Cover
12.03x
Comfortably covers interest (12.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
18.1x
Fair value — P/E 18.1

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year
P/E vs Forward
+4.6
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (18.1 → 13.5)

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Dividends

Dividend
Dividend Yield
3.22%
Moderate income — 3.22% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record
Dividend Growth
+20.2%
Dividend growing fast (20.2% YoY)
Payout Ratio
51%
no trend
Pays out a modest share of profit and keeps the rest to reinvest. Room to keep paying through a weak year.

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