Based on the provided data, I'll analyze whether ERIC is overvalued through multiple aspects.
Technical Analysis
The stock has shown significant weakness, falling from around $7.87 to $5.10 recently, indicating a strong downward trend.
Valuation Metrics
- Current P/S: 0.84 (2023) vs 0.72 (2022)
- Current P/B: 2.14 (2023) vs 1.50 (2022)
- EV/EBITDA: 7.65 (2023) vs 4.75 (2022)
Financial Performance
Revenue declined from $26.87B (2022) to $24.84B (2023), while net income turned negative from $1.85B profit to $2.49B loss, suggesting significant operational challenges.
Recent Performance
Q4 2024 results showed sales growth of only 1% YoY to SEK 72.9B, with EPS of $0.13 missing analyst estimates of $0.19.
Based on deteriorating fundamentals, declining margins, and increasing valuation multiples despite weaker performance, ERIC appears overvalued at current levels, particularly given the challenging telecom equipment market environment and ongoing operational struggles.