Should Value Investors Buy Ericsson (ERIC) Stock?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.One company to watch right now is Ericsson (ERIC). ERIC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 14.34, which compares to its industry's average of 28.44. Over the past year, ERIC's Forward P/E has been as high as 18.61 and as low as 12.48, with a median of 15.38. Another notable valuation metric for ERIC is its P/B ratio of 3.05. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 5.87. ERIC's P/B has been as high as 3.73 and as low as 2.72, with a median of 3.22, over the past year.Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ERIC has a P/S ratio of 1.38. This compares to its industry's average P/S of 2.13.Finally, we should also recognize that ERIC has a P/CF ratio of 22.19. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ERIC's current P/CF looks attractive when compared to its industry's average P/CF of 53.97. Over the past 52 weeks, ERIC's P/CF has been as high as 30.43 and as low as -47.05, with a median of 22.19.These are only a few of the key metrics included in Ericsson's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ERIC looks like an impressive value stock at the moment.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ericsson (ERIC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks