Telefonica (TEF) AI Stock Analysis

• Market Cap: €25.83B
• Dividend Yield: 6.15%
• Average Volume (3M): 6.55M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.79
• Revenue Growth: -5.22%
• EPS Growth: -250.59%
• Country: ES
• Employees: 100,870
• Sector: Services
• Sector Strength: N/A
• Industry: Telecommunications Services
• EPS (TTM): 0.07
• Shares Outstanding: 5,670,161,600
• 10 Day Avg. Volume: 7,274,792
• 30 Day Avg. Volume: 6,546,076
• PEG Ratio: 6.31
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 0.54
• P/FCF Ratio: 4.27
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €4.28
• Price Target Upside: -6.55% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6

• Rating: 60 Neutral
• Price Target: €5.00 ▲(9.17% Upside)

Telefonica's overall stock score reflects a balance of strengths and challenges. The company's strong cash flow and technical indicators are offset by negative profitability and valuation concerns. The high dividend yield is a positive factor for income investors.

Positive Factors

Debt Management

Net debt is 2% lower than expectations.

Revenue Performance

Q1 revenue is 1.3% ahead of consensus with Other and eliminations, Germany, and Hispam main contributors.

Negative Factors

Dividend Expectations

The 2025 dividend per share was in line with expectations.

Telefonica Business Overview & Revenue Model

Company Description

Telefonica S.A. is a global telecommunications company headquartered in Madrid, Spain. It operates in several countries, primarily in Europe and Latin America, and offers a wide range of services including mobile and fixed-line telephony, broadband, and digital solutions. As one of the largest telecommunications companies in the world, Telefonica is committed to providing innovative communications solutions to individuals, businesses, and governments.

How the Company Makes Money

Telefonica generates revenue through several key streams. The primary source is its telecommunications services, which include mobile voice and data services, fixed-line telephony, broadband internet, and television services. The company also earns money through digital services, such as cloud computing, cybersecurity, and IoT solutions, which cater to both consumer and enterprise markets. Additionally, Telefonica benefits from strategic partnerships and joint ventures, which enhance its service offerings and expand its market reach. The company's earnings are also influenced by regulatory environments, technological advancements, and competitive dynamics in the telecommunications industry.

Telefonica Financial Statement Overview

Summary

Telefonica faces profitability challenges and declining revenue, with a negative net income and declining free cash flow growth. Despite reasonable operational efficiency and manageable debt levels, these issues weigh heavily. A stable cash position provides some cushion, but improvements in revenue and profitability are needed.

Income Statement

Telefonica's income statement shows mixed performance. The TTM gross profit margin is approximately 69.5%, which is strong, yet the net profit margin is negative due to a net loss, indicating profitability challenges. Revenue has decreased over the last year, with a negative revenue growth rate of about -2.2%, suggesting declining sales. The EBIT margin stands at 6.1%, and the EBITDA margin is 30.7%, indicating reasonable operational efficiency despite the net loss.

Balance Sheet

The balance sheet reflects moderate financial stability. The debt-to-equity ratio is low at approximately 0.39, indicating manageable debt levels relative to equity. However, the company's return on equity is negatively impacted by the net loss. The equity ratio is 19.9%, suggesting a moderate reliance on equity financing. Overall, the balance sheet shows stability but highlights concerns regarding profitability.

Cash Flow

The cash flow statement indicates a stable cash position with an operating cash flow to net income ratio that is strong due to positive operating cash flows despite negative net income. The free cash flow to net income ratio is also favorable. However, the free cash flow growth rate is negative, reflecting challenges in increasing cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.93B	41.31B	40.65B	39.99B	39.28B	43.08B
Gross Profit	38.93B	28.76B	20.23B	27.05B	27.02B	30.06B
EBITDA	12.60B	12.35B	10.34B	13.54B	22.53B	13.82B
Net Income	-2.38B	-49.00M	-892.00M	2.01B	8.14B	1.58B
Balance Sheet
Total Assets	94.37B	100.50B	104.32B	109.64B	109.21B	105.05B
Cash, Cash Equivalents and Short-Term Investments	8.19B	9.26B	7.67B	9.69B	12.41B	8.10B
Total Debt	7.55B	45.02B	44.12B	8.68B	8.07B	50.85B
Total Liabilities	73.39B	77.75B	77.23B	77.93B	80.53B	86.79B
Stockholders Equity	17.28B	19.35B	14.30B	25.09B	22.21B	11.23B
Cash Flow
Free Cash Flow	5.35B	5.20B	5.49B	5.30B	4.10B	6.18B
Operating Cash Flow	10.84B	10.99B	11.65B	10.81B	10.27B	13.20B
Investing Cash Flow	-4.83B	-5.22B	-4.29B	-5.33B	5.90B	-7.79B
Financing Cash Flow	-4.49B	-4.67B	-7.19B	-7.92B	-12.99B	-5.44B

Telefonica Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:TEF, the sentiment is Positive. The current price of 4.58 is above the 20-day moving average (MA) of 4.54, above the 50-day MA of 4.54, and above the 200-day MA of 4.19, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 54.55 is Neutral, neither overbought nor oversold. The STOCH value of 48.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:TEF.

Telefonica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	€7.91B	5.13	17.03%	4.99%	6.79%	-169.89%
TEF	60 Neutral	€25.83B	―	-3.73%	6.15%	-5.22%	-250.59%
4HW	―	€68.87M	―		―	―	―
LLN	―	€19.47M	21.22	25.01%	―	―	―

Telefonica Corporate Events

Telefónica Issues 750 Million Euro Notes to Bolster Financial Strategy

Telefónica, through its subsidiary Telefónica Emisiones, has issued 750 million euros in notes under its EMTN Program, maturing in 2035 with a 3.941% annual coupon. This move signifies Telefónica’s strategic financial maneuver to strengthen its market position and ensure long-term operational stability, with the notes expected to be traded on Euronext Dublin.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Telefónica Sells Stake in Uruguayan Unit to Millicom for $440 Million

Telefónica has announced the sale of its entire stake in Telefónica Móviles del Uruguay S.A. to Millicom Spain, S.L. for USD 440 million. This move is part of Telefónica’s strategy to manage its asset portfolio and reduce its exposure in the Latin American market, pending regulatory approvals.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Telefonica Reports Q1 2025 Financial Results

Telefonica has released its financial results for the first quarter of 2025, prepared under the International Financial Reporting Standards. The company emphasizes its regional and integrated management model, which allows for the independent presentation of operational results by business units, excluding inter-company billing. This approach aims to provide a clearer view of the company’s performance, solvency, and liquidity, without affecting the consolidated results.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Telefónica Highlights Strategic Focus Amid Market Challenges

Telefónica’s recent financial results presentation highlights the company’s strategic focus on navigating competitive telecommunications markets. The release underscores the company’s commitment to sustainability and governance, while also addressing potential risks and uncertainties that could impact future operations.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.