Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 5.65%, higher than industry average of 3.25%.

Growth Trajectory

Profitability

In the growth phase company makes 11.24% profit on every dollar of sales, higher than industry average of 10.03%.

Profitability Trajectory

Risk Profile

Investors expect at least 9.39% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
251.99B SEK
Equity Value
251.82B SEK
FCF Yield
36.78%
Average ROIC
9.11%
Cost of Capital
8.33%
P/E Ratio
60.08x
Financial MetricMost Recent 12 months (SEK)Previous Year (SEK)
Revenues245.86B SEK247.88B SEK
Operating Income or EBIT29.45B SEK7.68B SEK
Interest Expense3.16B SEK3.55B SEK
Book Value Of Equity86.75B SEK94.28B SEK
Book Value Of Debt43.76B SEK45.54B SEK
Cash and Marketable Securities42.29B SEK60.76B SEK
Number of Shares Outstanding3.33B--
Minority interests-1.30B SEK0 SEK
Current Stock Price74.33 SEK--
Effective Tax Rate86.00%--
Marginal Tax Rate20.60%--

Performance vs Industry

Revenue Growth
-4.06%
-0.82%Company
vs
3.24%Industry
Below Industry
Operating Margin
+1.94%
11.97%Company
vs
10.03%Industry
Above Industry
Telefonaktiebolaget LM Ericsson (publ) demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
2.25%
Cost of Capital
6.48%
Return on Capital
6.47%
Reinvestment Rate
34.72%
Terminal value represents 88% of total enterprise value, based on 2.25% perpetual growth and 6.48% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 221.83B SEK Add
Present Value (Cash Flow Over Next 10 Years) 30.15B SEK Add
Value of Operating Assets 251.99B SEK Sub-total
Debt 43.75B SEK Subtract
Minority Interests -1.31B SEK Subtract
Cash 42.28B SEK Add
Value of Equity 251.82B SEK Sub-total
Number of Shares 3.33B shares Divisor
Estimated Value per Share (Fair Value) 75.54 SEK Total
Current Market Price 74.32 SEK Reference

Financial Projections

Total FCF Present Value
30.15B SEK
Avg Revenue Growth
3.74%
Avg Operating Margin
11.07%
Avg ROIC
9.11%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue250.78B SEK264.96B SEK279.94B SEK295.77B SEK312.50B SEK328.04B SEK342.13B SEK354.48B SEK364.87B SEK373.08B SEK381.48B SEK
Growth Rate 2.00% 5.65% 5.65% 5.65% 5.65% 4.97% 4.29% 3.61% 2.93% 2.25% 2.25%
PROFITABILITY
Operating Income30.04B SEK30.42B SEK31.45B SEK32.50B SEK33.56B SEK35.23B SEK36.74B SEK38.07B SEK39.19B SEK40.07B SEK40.97B SEK
Operating Margin 11.97% 11.48% 11.23% 10.98% 10.74% 10.74% 10.74% 10.74% 10.74% 10.74% 10.74%
EBIT (1-tax)4.20B SEK4.25B SEK4.40B SEK4.55B SEK4.69B SEK9.54B SEK14.75B SEK20.27B SEK25.99B SEK31.81B SEK32.53B SEK
CASH FLOW
Reinvestment6.34B SEK6.70B SEK7.08B SEK7.48B SEK6.95B SEK5.27B SEK4.62B SEK3.89B SEK3.07B SEK3.14B SEK11.29B SEK
Free Cash Flow-2.15B SEK-2.45B SEK-2.69B SEK-2.94B SEK-2.26B SEK4.26B SEK10.12B SEK16.37B SEK22.91B SEK28.67B SEK21.23B SEK
Terminal Value--------------------502.09B SEK
Present Value-1.96B SEK-2.05B SEK-2.05B SEK-2.05B SEK-1.45B SEK2.50B SEK5.49B SEK8.24B SEK10.78B SEK12.66B SEK—
EFFICIENCY
ROIC 4.76% 4.50% 4.34% 4.19% 4.05% 7.77% 11.52% 15.27% 19.02% 22.78% 6.47%
Cost of Capital 9.38% 9.38% 9.38% 9.38% 9.38% 8.80% 8.22% 7.64% 7.06% 6.47% 6.48%
Sales/Capital 2.23x 2.23x 2.23x 2.23x 2.23x 2.66x 2.66x 2.66x 2.66x 2.66x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow (krB)
Reinvestment (krB)