ERICSSON

Analysis of Ericsson share price

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Check out useful information about the Ericsson Company and its activities in this extensive file along with data about its share on the Stock Exchange with its real-time price and a historical technical analysis of its evolution over the last ten years.

Latest news

Ericsson : Better than expected forecast for 5G

17/06/2020 - 14h26

With its meteoric growth, 5G mobile telephony is surprising the world. Ericsson now expects to double its global forecast for 5G mobile subscriptions

Elements that can influence the price of this asset:

Analysis N°1

We'll essentially be monitoring the strategies implemented by the group to position itself on emerging markets with merger or acquisition operations carried out in these countries or economic zones.

Analysis N°2

The services segment is also a promising segment for Ericsson which could develop further in the coming years. This particularly concerns the network management services market.

Analysis N°3

The existing competition within this sector is obviously fierce so it's also necessary to take the rapid changes in this market into account, which is technically very complex as well. Keeping a close eye on all publications of giants of the telecommunications industry is vital, especially those involving major innovations in this sector.

Analysis N°4

Finally, patent filings made by Ericsson can of course have a very significant impact on the value of its share on the stock market.

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General presentation of Ericsson

The Ericsson group is a specialist in the design, production and sale of fixed and mobile communication devices. It mainly offers telephone and transmission network systems and equipment, as well as management and control services for networks and multimedia equipment.

With over 10 production sites worldwide, Ericsson mainly affects the European and Asian market, but also North America, the Middle East, Latin America and Sub-Saharan Africa.

The Ericsson share price is currently listed on the NASDAQ Main Market Large-cap QMX Nordic Stockholm in Sweden. Ericsson is also part of the European FTSE 100 stock market index and is therefore one of the 100 leading companies in Europe with the largest capitalization.

Analysis of Ericsson share price
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The major competitors of Ericsson

The Ericsson group, formerly specialized in mobile telephony terminals has since widely diversified its activities and products becoming one of the main equipment manufacturers of telecommunications technologies in the world. It therefore faces little competition but some large companies still threaten its market share. This is why it's essential to identify the companies competing with Ericsson before starting to speculate on the price of this asset.

Cisco and Huawei

On the networking equipment and software market, the Ericsson group is currently number three in the world with 9% of the market share. Its two main competitors are Cisco and Huawei, which respectively hold 19% and 11% of the market.

Other competitors

In the telecommunications equipment sector, Ericsson is in fifth place worldwide after Alcatel-Lucent, Allied Telesis, Avaya and Cisco but ahead of Huawei, Juniper, Nokia and ZTE.


The major partners of Ericsson

Amazon

In 2016, Ericsson signed several strategic partnerships with a few large groups. First with Amazon and the opening of an Innovation Centre in Australia. The objective is to benefit from Amazon Web Service infrastructures in Cloud, NFV and SDN technologies.

Intel

Ericsson signed a partnership that same year with Cisco, then with Intel in order to realise the first industrial 5G router.

PSA

In 2017, the PSA group signed a partnership agreement with Orange and Ericsson as part of a technological experiment on 5G and its possible use in the automotive sector. It's aimed at using the evolution of 4G technology to 5G into the manufacture of connected vehicles such as with intelligent transport systems.

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The factors in favour of a rise in the Ericsson share price:

First of all, we can of course highlight as one of the Ericsson Group's greatest strengths its very high flexibility in terms of product supply. The company is able to adapt its production to rising or falling demand and thus take account of changing market requirements. The same applies to the management of commercial solutions, which is also very flexible according to needs.

Ericsson is also a highly qualified company when it comes to mobile systems technology. The solutions developed and marketed by the company are considered to be of high quality, which effectively strengthens the company's brand image and boosts sales worldwide.

Industry analysts have also highlighted Ericsson's strong ability to reduce operating costs where necessary and to protect margins. To this end, the group has implemented a strategy that has proven to be very effective, mainly aimed at achieving economies of scale. This has enabled it to maintain a good level of profitability to date.

We also appreciate the company's strong international presence. Indeed, Ericsson currently markets its products and solutions in more than 180 countries around the world. This geographical distribution of its sales on the different continents prevents it from being too exposed to one and the same economic sector.

Of course, the Ericsson Group does everything in its power to maintain its position among the market leaders, in particular by striving to remain a highly innovative and technologically advanced company. To this end, it invests a lot of money in research and development every year and succeeds in developing new innovative solutions on a frequent and regular basis.

Last but not least, the Ericsson Group's workforce is also a real strength of the company. Indeed, to date, the group has no less than 100,000 employees around the world, which once again enables it to respond effectively to market needs.

The factors in favour of a drop in the Ericsson share price:

If you're still wondering whether you should take a buy or sell position in the Ericsson share, the few arguments for the company's growth that we've just cited may encourage you to opt for a buy strategy. However, before you take a decision in this direction, you should also be aware that this company also has weak points that you should not overlook in your analyses. These are the two main weaknesses of the Ericsson Group at the moment:

First of all, from a purely financial point of view, stock market investors and shareholders are hesitant about this stock because of the results published by the Ericsson Group. Indeed, the company shows a high variability in operating results over the last few years. This lack of stability can of course cause the market great concern by reducing long-term visibility and thus have a negative influence on the price of this asset.

Finally, it should also be noted that the Ericsson Group presents significant risks with regard to its relationship with its customers. This concerns in particular the credits granted to some of these customers and therefore a longer time to achieve the expected results following orders. This could also worry traders about the risk of non-payment of some important invoices.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

Where can I follow Ericsson's financial results and balance sheets?

If you wish to perform a financial analysis of Ercissson before trading this stock online, we recommend that you read the annual and quarterly financial statements of this stock. You can find these results on the company's website in the investor section. There you will also find information about the company's development and growth strategy and its objectives for the longer term.

What factors can cause the Ericsson share price to plummet?

Several external factors can have a negative influence on the Ericsson share price. These include a decline in financial results, the sale of some of its businesses to competitors, a commercial failure requiring major investments, or news about a competitor that causes it to lose market share to that competitor.

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