Telefonica (TEF) AI Stock Analysis

• Market Cap: €26.09B
• Dividend Yield: 6.06%
• Average Volume (3M): 7.35M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• 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: 8,953,456
• 30 Day Avg. Volume: 7,348,506
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €4.65
• Price Target Upside: 0.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 60 Neutral
• Price Target: €5.00 ▲(8.46% 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.

Future Growth Guidance

The company guides for organic growth in revenue, EBITDA and EBITDaL-Capex for 2025.

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 multiple sectors including mobile and fixed-line telecommunications, broadband, and digital services. Telefonica provides a wide range of products and services, such as voice and data services, internet access, and television services, primarily under the brands Movistar, O2, and Vivo across various regions, including Europe and Latin America.

How the Company Makes Money

Telefonica generates revenue through several key streams. The primary source is subscription fees from mobile and fixed-line telecommunications services, which include voice, SMS, and data services for individual consumers and businesses. Additionally, the company earns income from broadband internet subscriptions and digital television services. Another significant revenue stream comes from the sale of value-added services, including cloud computing, cybersecurity, and IoT (Internet of Things) solutions for enterprises. Telefonica has established partnerships with various technology companies to enhance its service offerings and expand its customer base, contributing to its earnings. The company also engages in wholesale services, providing network access to other telecommunications operators, further diversifying its revenue sources.

Telefonica Financial Statement Overview

Summary

Telefonica's financial performance is mixed. Strong gross profit margins and manageable leverage are positive, but negative net income and declining revenue growth are significant concerns. Cash flow generation is a bright spot, showing improvement.

Income Statement

Telefonica's income statement shows a mixed performance. The company has experienced a decline in revenue growth, with a negative growth rate of -3.62% in the TTM period. The gross profit margin remains strong at 100%, indicating efficient cost management. However, the net profit margin is negative, reflecting ongoing profitability challenges. EBIT and EBITDA margins are moderate, suggesting some operational efficiency but room for improvement.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.44 in the TTM period, indicating manageable leverage. However, the return on equity is negative, highlighting profitability issues. The equity ratio is stable, suggesting a solid asset base relative to equity. Overall, the balance sheet shows stability but with profitability concerns.

Cash Flow

Cash flow analysis indicates a positive free cash flow growth rate of 10.60% in the TTM period, reflecting improved cash generation. The operating cash flow to net income ratio is healthy, suggesting strong cash flow relative to earnings. However, the free cash flow to net income ratio indicates challenges in converting earnings to free cash flow. Overall, cash flow performance is solid with some areas for improvement.

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: Neutral
• Last Price: 4.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:TEF, the sentiment is Neutral. The current price of 4.61 is below the 20-day moving average (MA) of 4.68, above the 50-day MA of 4.59, and above the 200-day MA of 4.24, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 45.04 is Neutral, neither overbought nor oversold. The STOCH value of 15.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ES:TEF.

Telefonica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEF	60 Neutral	€26.09B	―	-3.73%	6.06%	-5.22%	-250.59%
Sector *	57 Neutral	$1.84B	9.34	8.02%	2.47%	5.38%	-37.86%
4HW	―	€66.12M	―		―	―	―
LLN	―	€27.77M	29.90	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.