Telefonaktiebolaget L M Ericsson ADR (ERIC) is undervalued and Hewlett Packard Enterprise Co (HPE) is overvalued.
Against our estimates of intrinsic value, ERIC trades at the wider discount: a margin of safety of +23%, against -5467% for HPE.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 9.3% (average of 3 methods) values the shares at $12.69; the price of $9.82 is 23% below that value, and 74% of that value comes from beyond year five.
Leak Score 100/100 on 3 of 12 signals
Its through-the-cycle earnings (4.2% median margin), capitalised at 10.4% with no growth, values the shares at $1.10; the price of $61.03 is 5467% above that value.
Leak Score 33/100 on 10 of 12 signals
| Metric | ERIC | HPE |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $9.82 | $61.03 |
| Intrinsic value | $12.69 | $1.10 |
| Margin of safety | +23% | -5467% |
| Leak Score | 100/100 (3/12) | 33/100 (10/12) |
| Market cap | $29.9B | $81.0B |
| Revenue growth, 5 years | -0.9% | 5.0% |
| Operating margin | 13.8% | 8.0% |
| Net margin | 10.8% | 6.4% |
| Return on equity | 26.3% | 11.0% |
| Debt to equity | 0.38 | 0.76 |
| P/E | 12.6x | 31.8x |
| Forward P/E | 14.9x | 13.3x |
| P/B | 3.0x | 3.1x |
| Dividend yield | 3.3% | 0.9% |