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Telefonica (TEF)
NYSE:TEF
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Telefonica
(NYSE:TEF)
Rating:64Neutral
Price Target:―
Telefonica (TEF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$29.57B
Dividend Yield4.56%
Average Volume (3M)721.39K
Price to Earnings (P/E)―
Beta (1Y)0.06
Revenue Growth1.18%
EPS GrowthN/A
CountryUS
Employees100,870
SectorCommunication Services
Sector Strength89
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.09
Shares Outstanding5,670,161,600
10 Day Avg. Volume741,767
30 Day Avg. Volume721,395
Financial Highlights & Ratios
PEG Ratio-7.16
Price to Book (P/B)1.24
Price to Sales (P/S)0.00
P/FCF Ratio4.74
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.68Price Target Upside-10.00% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Telefonica Business Overview & Revenue Model
Company DescriptionTelefónica S.A. is a multinational telecommunications company headquartered in Madrid, Spain. It is one of the largest telephone operators and mobile network providers in the world. The company operates in several sectors, primarily focusing on fixed and mobile telephony, broadband, and digital services for both consumer and enterprise markets. With a strong presence in Europe and Latin America, Telefónica offers a wide range of products and services including voice, data, internet, and digital solutions, positioning itself as a leader in the telecommunications industry.
How the Company Makes MoneyTelefónica generates revenue through multiple streams, primarily through its fixed and mobile telephony services. The company earns income from providing voice services, mobile data, and broadband internet access, which are offered to both individual consumers and businesses. Subscription fees, usage charges, and data packages constitute significant portions of Telefónica's earnings. Additionally, the company capitalizes on digital services and solutions, such as cloud computing, cybersecurity, and IoT (Internet of Things), which cater to the growing demand for digital transformation in various industries. Partnerships with content providers enhance their offerings in entertainment and media, further contributing to their revenue. Telefónica's strategic investments in network infrastructure and technology innovation also play a crucial role in maintaining its competitive edge and financial performance.
Telefonica Financial Statement Overview
Summary
Telefonica shows operational strength with robust gross profit and EBITDA margins but faces profitability challenges with negative net income. High leverage poses a risk, suggesting a need for better capital management. Cash flow concerns highlight potential liquidity issues, necessitating strategic adjustments.Income Statement
Telefonica's revenue has been relatively stable, with a moderate growth rate of 1.63% from 2022 to 2023. The gross profit margin is strong at around 69.6% for 2023, but the net profit margin is negative due to a net loss. EBIT and EBITDA margins remain healthy, indicating operational efficiency, but the negative net income is a concern.60
Neutral
Balance Sheet
Telefonica maintains a high debt-to-equity ratio, increasing from 2.02 in 2022 to 2.33 in 2023, which may pose financial risk. The equity ratio has decreased slightly to 18.54%. Return on equity is currently negative due to net losses, highlighting profitability challenges.55
Neutral
Cash Flow
Free cash flow decreased slightly from 2022 to 2023, indicating some pressure on cash generation. The operating cash flow has decreased significantly, impacting cash flow to net income ratios negatively. This suggests potential liquidity challenges despite positive free cash flow.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 41.31B | 40.65B | 39.99B | 39.28B | 43.08B | Gross Profit |
| 28.76B | 20.23B | 27.05B | 27.02B | 30.06B | EBIT |
| 2.40B | 2.59B | 4.06B | 13.59B | 6.01B | EBITDA |
| 12.35B | 10.34B | 13.54B | 22.53B | 13.82B | Net Income Common Stockholders |
| -49.00M | -892.00M | 2.01B | 8.14B | 1.58B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.26B | 7.67B | 9.69B | 12.41B | 8.10B | Total Assets |
| 100.50B | 104.32B | 109.64B | 109.21B | 105.05B | Total Debt |
| 45.02B | 44.12B | 8.68B | 8.07B | 5.29B | Net Debt |
| 36.96B | 36.96B | 1.43B | -510.00M | -310.00M | Total Liabilities |
| 77.75B | 77.23B | 77.93B | 80.53B | 86.79B | Stockholders Equity |
| 19.35B | 21.85B | 25.09B | 22.21B | 11.23B |
| Cash Flow | Free Cash Flow | |||
| 5.20B | 5.49B | 5.30B | 4.10B | 6.18B | Operating Cash Flow |
| 0.00 | 11.65B | 10.81B | 10.27B | 13.20B | Investing Cash Flow |
| -5.22B | -4.29B | -5.33B | 5.90B | -7.79B | Financing Cash Flow |
| -4.67B | -7.19B | -7.92B | -12.99B | -5.44B |
Telefonica Technical Analysis
Positive
5.20
Price Trends
4.82
Positive
4.51
Positive
4.48
Positive
Market Momentum
0.08
Negative
64.19
Neutral
97.83
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEF, the sentiment is Positive. The current price of 5.2 is above the 20-day moving average (MA) of 5.02, above the 50-day MA of 4.82, and above the 200-day MA of 4.48, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 64.19 is Neutral, neither overbought nor oversold. The STOCH value of 97.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TEF.
Telefonica Risk Analysis
Telefonica disclosed 16 risk factors in its most recent earnings report. Telefonica reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Telefonica Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $15.92B | 15.71 | 7.95% | 3.88% | -5.69% | -0.05% | |
76 Outperform | $16.40B | 11.33 | 16.28% | 5.00% | -5.14% | -7.47% | |
73 Outperform | $34.42B | 29.70 | 9.59% | 2.56% | -0.19% | -0.79% | |
71 Outperform | $25.87B | 9.21 | -7.17% | 6.65% | -24.84% | -74.77% | |
71 Outperform | $53.54B | 32.14 | 8.54% | 2.88% | 0.19% | -49.68% | |
64 Neutral | $29.57B | ― | -0.55% | 4.56% | 1.18% | ― | |
60 Neutral | $14.12B | 6.43 | -3.56% | 3.69% | 2.49% | -35.43% |
* Communication Services Sector Average
Performance Comparison
TEF
Telefonica
5.20
0.93
21.78%
AMX
America Movil
17.56
-1.05
-5.64%
CHT
Chunghwa Telecom Co
44.36
6.20
16.25%
TLK
PT Telekomunikasi Indonesia Tbk
16.74
-1.41
-7.77%
VIV
Telefonica Brasil
9.78
1.52
18.40%
VOD
Vodafone
10.47
1.76
20.21%
Telefonica Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: 6.78%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong performance in core markets and network expansion, alongside challenges like forex impacts and revenue declines in specific segments. The company remains focused on strategic execution and maintaining financial flexibility.Q1-2025 Updates
Positive Updates
Strong Customer Engagement and Network Expansion
NPS scores reached new highs with Spain leading, and strong improvements in Brazil and Germany. Rolled out fiber to over 1.5 million premises and reached 75% 5G coverage in core markets.
Growth in Core Markets
Spain, Brazil, and Germany showed strong performance in key commercial and financial metrics, with Spain's domestic revenue growing by 1.7% year-on-year and Brazil's revenue rising 6% above inflation.
Reduction in Net Debt
Net debt decreased by €0.1 billion in the first three months of the year, with a further reduction to €25.8 billion expected after the sale of Peru and the signing of the binding agreement for Colombia.
Telefonica Tech and Infra Growth
Telefonica Tech's revenue increased by 6.6% year-on-year, with a 15% expansion in the commercial funnel. Telefonica Infra reached 29 million premises passed with fiber.
Negative Updates
Forex Impact on Financial Metrics
Reported results were negatively affected by forex, impacting revenue and EBITDA figures despite organic growth in main metrics.
Wholesale Revenue Decline in Spain
Wholesale revenues declined in Q1 as anticipated, affecting overall financial performance despite new long-term agreements signed in 2024.
Hispam EBITDA Decline
EBITDA minus CapEx in Hispam fell 31% due to lower EBITDA and higher lease costs related to the single network launch in Colombia.
Company Guidance
During the Q1 2025 results conference call, Telefonica provided guidance indicating that they are on track to meet their 2025 financial targets across various metrics, including revenue, EBITDA, and EBITDA minus CapEx, all expected to grow organically. The company highlighted robust performance in key markets such as Spain, Brazil, and Germany, with particular emphasis on their fiber and 5G network expansion. Fiber was rolled out to over 1.5 million premises, achieving 75% 5G coverage in core markets. Despite forex impacts, they reported a net debt decrease, with free cash flow expected to align with 2024 figures, emphasizing a commitment to maintaining financial flexibility and operational excellence. The company reiterated its dividend for 2025, underscoring a strategy focused on customer engagement, network transformation, and efficiency gains. Additionally, they announced a strategic review to be completed in the second half of the year, aimed at further enhancing their operational and financial performance.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.