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Operations: Ericsson's revenue segments include Networks at SEK158.21 billion, Enterprise at SEK24.86 billion, and Cloud Software and Services at SEK62.64 billion.

Estimated Discount To Fair Value: 49.3%

Telefonaktiebolaget LM Ericsson, trading at SEK83.46, is significantly undervalued with a fair value estimate of SEK164.57 based on discounted cash flow analysis. Recent strategic alliances, such as the partnership with Volvo and Bharti Airtel for 5G and XR technologies, highlight potential growth avenues despite large one-off items impacting financial results. Earnings are forecast to grow significantly faster than the Swedish market at 47% annually, although revenue growth remains modest at 1.9% per year.

• In light of our recent growth report, it seems possible that Telefonaktiebolaget LM Ericsson's financial performance will exceed current levels.

• Get an in-depth perspective on Telefonaktiebolaget LM Ericsson's balance sheet by reading our health report here.

dormakaba Holding

Overview: dormakaba Holding AG is a global provider of access and security solutions, with a market capitalization of CHF2.90 billion.

Operations: The company's revenue segments include Access Solutions, generating CHF2.44 billion, and Key & Wall Solutions and OEM, contributing CHF496.40 million.

Estimated Discount To Fair Value: 49.2%

dormakaba Holding, trading at CHF691, is significantly undervalued with a fair value estimate of CHF1359.06 based on discounted cash flow analysis. Despite high debt levels, the company has shown robust earnings growth, with net income rising to CHF50.4 million for H1 2025 from CHF24.9 million a year ago. Strategic alliances and innovative solutions in critical infrastructure sectors bolster its potential for profit growth, forecasted to outpace the Swiss market at 27% annually.

• The analysis detailed in our dormakaba Holding growth report hints at robust future financial performance.

• Click to explore a detailed breakdown of our findings in dormakaba Holding's balance sheet health report.

Where To Now?

• Navigate through the entire inventory of 204 Undervalued European Stocks Based On Cash Flows here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include OB:NOD OM:ERIC B and SWX:DOKA.

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