Should I Buy Ericsson Stock in 2025? NZ Investor Analysis

What is Ericsson?

How much is the Ericsson stock?

The price of Ericsson stock is trending lower this week. As of now, Ericsson trades at $8.52 USD, with a 24-hour drop of -0.23% and a weekly change of -2.85%.

A notably high P/E ratio and a relatively stable beta indicate lower volatility. For New Zealand investors, this stability may appeal to those seeking exposure to the telecommunications sector while managing market swings.

Our full analysis on the Ericsson stock

Having scrutinised Ericsson’s latest quarterly results and evaluated its performance trajectory over the past three years, we have leveraged an integrated suite of financial metrics, technical signals, market data, and competitor insights via our proprietary analytical algorithms. This multi-faceted approach provides a robust, data-driven perspective on the underlying value and future prospects of Ericsson’s shares. So, why might Ericsson stock once again become a strategic entry point into the global telecommunications technology sector as we move into 2025?

Recent Performance and Market Context

Ericsson (NASDAQ: ERIC), a titan in telecom infrastructure, has shown measured but definitive recovery in market performance. As of 30 May 2025, shares were trading at $8.52 USD, not far from the 52-week peak of $9.00 and a substantial distance from the 52-week low of $5.76. Over the last twelve months, Ericsson has notched an impressive 45% appreciation, clearly outpacing many sector rivals and the broader equity index. This robust advance, particularly striking over the last year, indicates major investor confidence returning to the stock.

Key recent events have further strengthened market sentiment. The Q4 2024 earnings release in January 2025 delivered above-expectation results, driven by a notable 54% sales surge in North America and improved margins globally. Additionally, strategic moves—such as the launch of advanced 5G solutions and the signing of breakthrough network contracts—underscore Ericsson’s competitive edge. The wider sector context remains supportive: the global roll-out of 5G, persistent demand for advanced network hardware, and sustained digitalisation initiatives all favour established leaders like Ericsson. Furthermore, moderate US interest rate expectations and the search for quality, dividend-yielding stocks enhance appeal for global investors, NZ-based institutions included, seeking both growth and defensive attributes.

Technical Analysis

Technically, Ericsson presents a compelling bullish setup. Key technical indicators reinforce this positive outlook as of late May 2025:

• Relative Strength Index (RSI): 55.4, suggesting the stock has further upside potential without being overbought;
• MACD: Positive at 0.17, a classic buy signal of gathering momentum;
• Williams %R: -59.5, indicating underlying buying activity;
• Commodity Channel Index (CCI): 41.5, a neutral stance with upside rotation potential.

Crucially, Ericsson is trading above its 20-day ($8.46), 50-day ($8.09), 100-day ($8.04), and 200-day ($7.88) moving averages—each signalling continued short and medium-term upward momentum. The key technical support sits at $8.47, just below current levels, while clear resistance is defined at $9.00, the 52-week high. Consensus technical models generate a strong “buy” signal, with 12 out of 22 major indicators favouring further advance. In summary, Ericsson’s chart structure appears primed for renewed bullish phases, and the current pullback towards support levels may offer investors an attractive technical entry point.

Fundamental Analysis

Ericsson’s fundamentals now reveal a story of operational discipline, strategic expansion, and renewed profitability. Despite full-year 2024 organic revenue contracting by -5% (SEK 247.9B), Q4 saw year-on-year organic growth return (+2%). More importantly, profitability metrics are robust: gross margins widened to 46.3% from 41.1%, EBITA margin topped 14.1%, and net profit surged to SEK 4.9B (up from SEK 3.4B). Diluted EPS came in at SEK 1.44 versus SEK 1.02 prior.

One of the standout stories is Ericsson’s free cash flow: soaring from negative SEK 1.1B in 2023 to an impressive SEK 40.0B in 2024, supporting both future investments and a healthy shareholder return. The company holds net cash of SEK 37.8B, underlining balance sheet strength.

Valuation also appears attractive relative to sector peers, especially after a long period of sector underperformance. With a P/S ratio of 1.10 and a price-to-book close to 3.2, the current multiples seem defensible against its improving profitability. Admittedly, the trailing P/E appears high (~170x), but forward earnings estimates incorporating margin recovery and continued topline revival suggest this ratio could sharply normalise.

From a structural standpoint, Ericsson’s strategic focus on leadership in 5G, innovation in programmable (“open”) networks, and a rich intellectual property (IP) portfolio generating strong licensing revenues all reinforce its competitive moat. The firm’s commitment to R&D ensures ongoing technological leadership—a key differentiator amid intensifying global competition.

Volume and Liquidity

Liquidity and volume dynamics further reinforce the strength of the current investment thesis. Average trading volume over 65 days stands at 27 million shares, a healthy figure for an international ADR, and ensures sizeable institutional orders can be executed with minimal friction. Ericsson’s $28.9B USD market capitalisation and a substantial float (3.09B shares outstanding) make for a stock well-suited to dynamic, fair-market valuation discovery. This solid volume profile also signals ongoing market confidence and the ability for new entrants to take positions or exit efficiently should market conditions change.

Catalysts and Positive Outlook

A suite of powerful catalysts supports the positive case for Ericsson as we approach mid-2025:

• 5G Evolution: Launch of new 5G Advanced solutions in October 2024 positions Ericsson to secure premium contracts as telecom operators globally transition to the next phase of high-speed connectivity—a secular tailwind.
• API Network Growth: Surge in demand for proprietary network APIs for premium fraud protection and “on-demand” network quality services, opening recurring software revenue avenues.
• Market Rebound: Signs of stabilisation and rebound in the global radio access network (RAN) market, with North America leading, mitigate prior regional headwinds and underpin topline revival.
• Operational Excellence: Disciplined execution in supply chain and commercial strategy, as evidenced by record operating margins and improved visibility into cost structure.
• IP Licencing: New patent licensing agreements continue to bolster IPR revenues—a high-margin, defensive business segment with unique competitive advantage.
• Corporate Actions: Strategic alliances such as the open network partnership with MasOrange, the first of its kind in Europe, signal technological leadership and entrée into new growth pockets.
• Sustainability and ESG: Continued improvement in energy efficiency of network products and ESG disclosure, increasing appeal for sustainability-focused global portfolios.

Analysts now forecast a consensus target price of $9.80 (+15% potential upside), with some bullish models suggesting further gains towards $11.08 if operational momentum continues unabated. The next major reporting catalyst will be the July 2025 earnings release, which could validate further upgrades.

Investment Strategies

For investors positioning in Ericsson, the current climate seems advantageous from multiple perspectives:

• Short-term: The recent healthy pullback (-2.85% over the past week) positions shares near the key support zone ($8.47), offering technically minded investors a credible risk/reward setup ahead of the July earnings announcement.
• Medium-term: With established momentum (all key moving averages trending higher, strong technical consensus) and a 15% upside to analyst fair value, a holding period through 2025’s likely positive catalysts appears justified.
• Long-term: With a robust free cash flow profile, an emerging growth trajectory in 5G/6G, and strengthening IP revenues, Ericsson offers solid long-term participation in the secular digital infrastructure buildout, complete with a 2–3% dividend yield that should appeal to growth-and-income portfolios in New Zealand and beyond.

Ideal positioning may be achieved on retests of technical support or as anticipation builds ahead of major product launches and earnings events.

Is it the Right Time to Buy Ericsson?

In summary, Ericsson showcases a convincing blend of renewed momentum, structural financial discipline, and sectoral leadership that is difficult to overlook at current valuations. Key strengths include:

• Persistent outperformance versus sector and index over the past 12 months
• Robust gross margin and strong return to positive free cash flow
• Defensive and growing dividend yield of 2–3%
• Confirmed leadership in 5G/programmable networks, powerful innovation pipeline, and a deep licencing/IP portfolio
• Broad technical support for continued advance, with recent pullback offering a timely entry point
• Several near-term and structural catalysts likely to drive further re-rating

While all investments carry inherent risks, the fundamentals, technicals, and macro context combine to make Ericsson appear well positioned for a potentially strong 2025. The weight of evidence supports renewed interest, and for New Zealand-based investors seeking diversified global tech exposure with both growth and income attributes, Ericsson seems to represent an excellent opportunity in the dynamic digital infrastructure sector.

As the next wave of 5G adoption accelerates and Ericsson’s strategic initiatives bear fruit, the stock may well be poised to enter a new bullish phase—making now a compelling moment to seriously consider this iconic name for medium- and long-term portfolios.

How to buy Ericsson stock in New Zealand?

Buying shares in Ericsson (NASDAQ: ERIC) online is a straightforward and secure process when using a regulated broker in New Zealand. Investors have the choice between two main options: buying shares outright (spot buying) or trading Contracts for Difference (CFDs). Spot buying means you own the actual shares, while CFDs allow you to speculate on price movements with the flexibility of leverage. Both methods can be accessed via easy-to-use online platforms, and safety is reinforced by NZ regulations and investor protection schemes. To find the most suitable broker for your needs, refer to our broker comparison further down this page.

Spot buying

When you buy Ericsson shares for cash through a broker, you acquire direct ownership in the company. This means you benefit from any price gains and may receive dividends that Ericsson distributes (currently yielding around 2–3% p.a.). In New Zealand, brokers typically charge a fixed commission per order, often around NZD $5 to $15, depending on the platform.

Example with a $1,000 NZD investment

- The current price of Ericsson ADRs is about USD $8.52 (around NZD $14 at current exchange rates).
- Suppose you invest NZD $1,000 and pay a $5 brokerage fee.
- You would be able to purchase about 70 shares ($1,000 – $5 ≈ $995; $995 / $14 ≈ 70 shares).

✔️ Gain scenario

If Ericsson’s share price rises by 10%, your investment would now be worth NZD $1,100.
Result: That’s a gross gain of NZD $100, or +10% on your initial outlay (before tax and currency effects).

Trading via CFD

CFDs (Contracts for Difference) let you speculate on Ericsson’s share price movement without owning the underlying shares. You can go long (bet on a price increase) or short (bet on a decrease) and use leverage to amplify your exposure. CFD fees generally consist of a spread (the difference between buy/sell price) and potential overnight financing charges if you hold the position for several days.

Example with a $1,000 NZD stake and 5x leverage

- You open a CFD position for Ericsson shares with 5x leverage, giving you market exposure of NZD $5,000.
- If the share price increases by 8%, your leveraged position gains 8% × 5 = 40%.
Result: You earn a gross gain of NZD $400 on your NZD $1,000 margin (excluding spreads and overnight fees).

Final advice

Before investing, it’s essential to compare the fees, commissions, and terms offered by different NZ-compliant brokers; these can vary significantly and impact your returns. The best method for you—spot buying or CFD trading—depends on your investment goals: long-term ownership with dividend potential, or short-term speculation with leverage. For a detailed comparison of the most trusted online brokers for Ericsson shares in New Zealand, consult our broker overview further down this page. Happy investing!

Our 7 tips for buying Ericsson stock

The latest news about Ericsson

Ericsson’s technical indicators as of May 30, 2025 show persistent buy signals and stable upward momentum. Recent technical analysis highlights a favorable environment for Ericsson shares, with the 20-day, 50-day, 100-day, and 200-day moving averages all flashing buy signals, complemented by bullish readings on both the MACD and Williams %R. The Relative Strength Index (RSI) stands at a neutral 55.41, further reinforcing a stable sentiment, while the stock’s current price of $8.52 sits just above key support of $8.47 and below a resistance at the one-year high of $9.00. For New Zealand (NZ) investors, such technical resilience, especially following a strong year (+45% annual return), suggests further confidence in Ericsson as a defensive technology play with potential for additional gains.

Ericsson’s Q4 2024 financials exceeded analyst expectations with notably improved margins and strong free cash flow. The company reported SEK 72.9B in fourth-quarter revenue, up 2% organically, while adjusted gross margin surged to 46.3% compared to last year’s 41.1%. EBITA margin also improved to 14.1%, and free cash flow rose markedly to SEK 40B for the year. This robust cash generation allowed Ericsson to propose a SEK 2.85 per-share dividend, supporting an attractive yield of 2–3%. These fundamental strengths are especially relevant for NZ pension funds and income-focused investors seeking global exposure to high-quality dividend stocks in the technology and telecommunications sectors.

Recent product innovation and 5G leadership underscore Ericsson’s relevance for advanced markets including NZ’s telco sector. In October 2024, Ericsson launched a suite of 5G Advanced software solutions and expanded its portfolio of programmable network APIs, with a focus on anti-fraud and on-demand quality services. Given New Zealand’s ongoing nationwide 5G rollout and the government’s strong commitment to secure, cutting-edge telecommunications infrastructure, Ericsson’s technological leadership and proven ability to deliver next-generation solutions may present direct partnership and procurement opportunities for NZ telcos and enterprises.

The global market outlook for Ericsson is further buoyed by stabilization trends in the radio access network (RAN) segment and renewed licensing revenue streams. While North America remains a key growth driver, the stabilizing RAN environment and a series of new IPR (patent) licensing agreements in 2024 provide reliable, diversified revenue streams for Ericsson. For NZ investors, this diversification reduces exposure to cyclical swings in any one market and leverages Ericsson’s intellectual property model, which is increasingly valued as Asia-Pacific operators seek proven, licensable network technology.

Analyst consensus points to moderate upside and continued hold recommendations, supporting a low-risk profile for NZ incremental investors. The current analyst price target consensus stands at $9.80—about 15% above current levels—with a stable “hold” recommendation (no recent downgrades or sell ratings). Combined with a beta between 0.44 and 0.89, Ericsson shares offer lower market volatility, which may appeal to New Zealand institutional and retail investors looking for stable defensive growth and income potential within the global technology infrastructure landscape.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.