Ericsson (ERIC) Hit a 52 Week High, Can the Run Continue?

A strong stock as of late has been Ericsson (ERIC). Shares have been marching higher, with the stock up 7.8% over the past month. The stock hit a new 52-week high of $10.53 in the previous session. Ericsson has gained 8.1% since the start of the year compared to the 27.4% gain for the Zacks Computer and Technology sector and the 37.4% return for the Zacks Wireless Equipment industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 23, 2026, Ericsson reported EPS of $0.27 versus consensus estimate of $0.23 while it beat the consensus revenue estimate by 4.74%.

For the current fiscal year, Ericsson is expected to post earnings of $0.63 per share on $24.6 in revenues. This represents a -7.35% change in EPS on a 1.84% change in revenues. For the next fiscal year, the company is expected to earn $0.71 per share on $25.32 in revenues. This represents a year-over-year change of 14.02% and 2.94%, respectively.

Valuation Metrics

While Ericsson has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Ericsson has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 16.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.8X. On a trailing cash flow basis, the stock currently trades at 16.2X versus its peer group's average of 18.7X. Additionally, the stock has a PEG ratio of 1.97. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Ericsson currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Ericsson fits the bill. Thus, it seems as though Ericsson shares could have potential in the weeks and months to come.

How Does ERIC Stack Up to the Competition?

Shares of ERIC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Clearfield, Inc. (CLFD). CLFD has a Zacks Rank of #1 (Strong Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of F.

Earnings were strong last quarter. Clearfield, Inc. beat our consensus estimate by 44.44%, and for the current fiscal year, CLFD is expected to post earnings of $0.54 per share on revenue of $164.4 million.

Shares of Clearfield, Inc. have gained 2% over the past month, and currently trade at a forward P/E of 56.98X and a P/CF of 39.87X.

The Wireless Equipment industry is in the top 25% of all the industries we have in our universe, so it looks like there are some nice tailwinds for ERIC and CLFD, even beyond their own solid fundamental situation.

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This article originally published on Zacks Investment Research (zacks.com).

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