Telefonaktiebolaget L M Ericsson ADR (ERIC) is undervalued and Lumentum Holdings Inc (LITE) is overvalued.
Against our estimates of intrinsic value, ERIC trades at the wider discount: a margin of safety of +23%, against -1899% for LITE.
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
Discounting its cash flows at 11.8% (average of 2 methods) values the shares at $47.31; the price of $945.67 is 1899% above that value.
Leak Score 41/100 on 8 of 12 signals
| Metric | ERIC | LITE |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $9.82 | $945.67 |
| Intrinsic value | $12.69 | $47.31 |
| Margin of safety | +23% | -1899% |
| Leak Score | 100/100 (3/12) | 41/100 (8/12) |
| Market cap | $29.9B | $84.8B |
| Revenue growth, 5 years | -0.9% | 11.6% |
| Operating margin | 13.8% | 17.9% |
| Net margin | 10.8% | -230.1% |
| Return on equity | 26.3% | -240.0% |
| Debt to equity | 0.38 | 0.36 |
| P/E | 12.6x | — |
| Forward P/E | 14.9x | 27.9x |
| P/B | 3.0x | 18.0x |
| Dividend yield | 3.3% | — |