Ericsson Stock Looks Unlikely To Sustain Its Earnings Driven Outperformance

+51.46%
Upside
6.38
Market
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ERIC: Ericsson logo
ERIC
Ericsson

Ericsson stock (NASDAQ: ERIC) is up 12% in the past month, outperforming the S&P 500 which was up 7.9% over this period. If you look at the change over the last ten days, too, the stock has returned 10%, performing much better than the broader markets. Ericsson’s most recent Q3 ’22 earnings, saw revenue rising from $5.29 billion in Q3 ’21 to $6.39 billion in Q3 ’22. However, with rising operating costs, the company reported lower operating margins of 10.5%, down from 15.7% for Q3 ’21. Due to this, the company’s net earnings dropped, and EPS came in lower at $0.15, compared to $0.16 in Q3 ’21.

Now, is Ericsson stock set to continue its outperformance or could we expect a pullback? We believe that there is a weak 43% chance of a rise in ERIC stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on ERIC Stock Chance of Rise. For additional details about the company’s historical returns and comparison to peers, see Ericsson (ERIC) Stock Return

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Twenty-One Day: ERIC 12%, vs. S&P500 7.9%; Outperformed market

(7% likelihood event; 43% probability of rise over next 21 days)

  • ERIC stock gained 12% over the last twenty-one trading days (one month), compared to a broader market (S&P500) rise of 7.9%
  • A change of 12% or more over twenty-one trading days is a 7% likelihood event, which has occurred 165 times out of 2516 in the last 10 years
  • Of these 165 instances, the stock has seen a positive movement over the next twenty-one trading days on 71 occasions
  • This points to a 43% probability for the stock rising over the next twenty-one trading days

Ten Day: ERIC 10%, vs. S&P500 4.8%; Outperformed market

(5% likelihood event; 44% probability of rise over next 10 days)

  • ERIC stock gained 10% over the last ten trading days (two weeks), compared to a broader market (S&P500) rise of 4.8%
  • A change of 10% or more over ten trading days is a 5% likelihood event, which has occurred 120 times out of 2519 in the last 10 years
  • Of these 120 instances, the stock has seen a positive movement over the next ten trading days on 53 occasions
  • This points to a 44% probability for the stock rising over the next ten trading days

Five Day: ERIC -1.1%, vs. S&P500 -1%; Underperformed market

(36% likelihood event; 54% probability of rise over next five days)

  • ERIC stock dropped -1.1% over a five-day trading period ending 11/17/2022, compared to the broader market (S&P500) which was down 1% over this period.
  • A change of -1.1% or more over five trading days (one week) is a 36% likelihood event, which has occurred 918 times out of 2518 in the last 10 years
  • Of these 918 instances, the stock has seen a positive movement over the next five trading days on 497 occasions
  • This points to a 54% probability for the stock rising over the next five trading days

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 ERIC Return 10% -44% 5%
 S&P 500 Return 2% -17% 77%
 Trefis Multi-Strategy Portfolio 3% -20% 217%

[1] Month-to-date and year-to-date as of 11/18/2022
[2] Cumulative total returns since the end of 2016

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