Telefonica (TEF) AI Stock Analysis

• Market Cap: $23.79B
• Dividend Yield: 7.89%
• Average Volume (3M): 700.95K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.03
• Revenue Growth: -5.49%
• EPS Growth: -75.51%
• Country: US
• Employees: 100,870
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 0.10
• Shares Outstanding: 5,670,161,600
• 10 Day Avg. Volume: 938,257
• 30 Day Avg. Volume: 700,948
• PEG Ratio: 5.70
• Price to Book (P/B): 1.13
• Price to Sales (P/S): 0.53
• P/FCF Ratio: 4.20
• Enterprise Value/Market Cap: 3.19
• Enterprise Value/Revenue: 1.98
• Enterprise Value/Gross Profit: 2.37
• Enterprise Value/Ebitda: 5.22
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: $4.00 ▼(-24.53% Downside)

Telefonica's overall stock score is primarily impacted by its financial performance challenges, including declining revenue and profitability. The technical analysis indicates bearish momentum, further weighing down the score. While the high dividend yield offers some appeal, the negative P/E ratio reflects underlying financial difficulties.

Telefonica Business Overview & Revenue Model

Company Description

Telefonica (TEF) is a leading global telecommunications company based in Spain, operating in multiple countries across Europe and Latin America. The company provides a wide range of services, including fixed and mobile telephony, broadband, digital television, and various value-added services. Telefonica focuses on enhancing connectivity and digital transformation for its customers, leveraging innovative technology to deliver solutions across both consumer and business sectors.

How the Company Makes Money

Telefonica primarily generates revenue through its telecommunications services, which include mobile and fixed-line voice services, broadband internet access, and television services. The company has a diverse revenue model, with key revenue streams coming from mobile services, including voice and data plans, as well as fixed broadband subscriptions. Additionally, Telefonica earns from value-added services such as cloud solutions, cybersecurity, and Internet of Things (IoT) offerings. Significant partnerships with technology providers and content creators further enhance its service portfolio and drive revenue growth. The company's strategic focus on digital services and customer retention initiatives, along with cost optimization strategies, also contribute positively to its overall earnings.

Telefonica Financial Statement Overview

Summary

Telefonica faces challenges in revenue growth and profitability, with significant net losses impacting overall financial health. While leverage is moderate, the negative return on equity and declining free cash flow growth highlight potential risks. The company needs to focus on improving operational efficiency and profitability to enhance financial stability.

Income Statement

Telefonica's income statement shows a declining revenue trend with a negative revenue growth rate of -1.70% in the TTM period. The company is facing profitability challenges, as indicated by a negative net profit margin of -6.12% and a declining EBIT margin. The gross profit margin remains strong, but the overall profitability is hindered by significant net losses.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.44 in the TTM period, indicating manageable leverage compared to previous years. However, the return on equity is negative, suggesting inefficiencies in generating returns for shareholders. The equity ratio is stable, showing a reasonable proportion of equity financing.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by -9.64% in the TTM period, indicating potential cash generation issues. The operating cash flow to net income ratio is positive, suggesting that the company is generating cash from operations despite net losses. However, the free cash flow to net income ratio indicates that cash flow is not sufficient to cover net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.27B	41.31B	40.65B	39.99B	39.28B	43.08B
Gross Profit	32.04B	28.76B	20.23B	27.84B	27.79B	30.93B
EBITDA	14.55B	12.35B	10.34B	14.79B	22.52B	14.36B
Net Income	-2.12B	-49.00M	-892.00M	2.01B	8.14B	1.58B
Balance Sheet
Total Assets	92.57B	100.50B	104.32B	109.64B	109.21B	105.05B
Cash, Cash Equivalents and Short-Term Investments	4.39B	9.26B	7.67B	8.54B	10.66B	8.10B
Total Debt	42.90B	45.02B	44.12B	45.39B	48.17B	50.85B
Total Liabilities	71.22B	77.75B	77.23B	77.93B	80.53B	86.79B
Stockholders Equity	17.61B	19.35B	21.85B	25.09B	22.21B	11.23B
Cash Flow
Free Cash Flow	4.84B	5.20B	5.49B	5.41B	3.54B	6.18B
Operating Cash Flow	10.33B	10.99B	11.65B	11.76B	10.27B	13.20B
Investing Cash Flow	-5.47B	-5.22B	-4.29B	-5.33B	5.90B	-7.79B
Financing Cash Flow	-6.45B	-4.67B	-7.19B	-7.92B	-12.99B	-5.44B

Telefonica Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEF, the sentiment is Negative. The current price of 5.3 is above the 20-day moving average (MA) of 4.96, above the 50-day MA of 5.10, and above the 200-day MA of 4.90, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 18.87 is Positive, neither overbought nor oversold. The STOCH value of 3.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TEF.

Telefonica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIV	77 Outperform	$20.28B	19.03	8.36%	4.85%	-3.16%	4.70%
AMX	74 Outperform	$70.00B	18.34	17.70%	2.40%	1.14%	83.48%
TLK	74 Outperform	$20.60B	15.32	15.54%	6.22%	-5.21%	-7.45%
CHTR	66 Neutral	$56.90B	6.06	34.79%	―	0.42%	13.46%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
VOD	54 Neutral	$27.74B	―	-7.17%	4.27%	0.89%	-494.16%
TEF	45 Neutral	$23.79B	―	-0.70%	7.89%	-5.49%	-75.51%

Telefonica Corporate Events

Telefónica Outlines Strategic Growth Plans Up to 2030

On November 4, 2025, Telefónica held its Capital Markets Day in Madrid, outlining strategic guidelines for growth up to 2030. The company anticipates revenue growth with a CAGR of 1.5-2.5% from 2025 to 2028, accelerating to 2.5-3.5% from 2028 to 2030. Adjusted EBITDA and OpCFaL are expected to follow similar growth patterns. Telefónica plans to reduce its CapEx/Sales ratio to around 12% by 2026-2028 and further to 11% by 2030, while targeting a leverage reduction to 2.5x Net debt/EBITDAaL by 2028. The company also announced a 2025 dividend of 0.30 euro per share, with future dividends based on a 40-60% payout of the FCF base.

Telefónica Q3 2025 Results: Growth and Strategic Transformations

Telefónica reported its financial results for the third quarter of 2025, highlighting consistent growth and strong operational performance across its business units. The company achieved a year-on-year revenue growth of 0.4%, with notable increases in Spain and Brazil. Telefónica’s focus on customer satisfaction and network expansion, particularly in fiber and 5G, contributed to its positive performance. The company also continued its strategic portfolio transformation in Latin America, selling several regional operations. Telefónica confirmed its guidance for 2025, expecting continued growth in revenue, EBITDA, and EBITDAaL-CapEx, while maintaining a CapEx to sales ratio below 12.5%.

Telefónica Reports Q3 2025 Results with Strategic Network Expansion

Telefónica, S.A. reported its financial results for the first nine months of 2025, highlighting a strategic focus on customer-centric operations and network efficiency. The company achieved notable milestones such as the expansion of its fiber and 5G networks, with 82.6 million fiber connections and 78% 5G coverage in core markets. Despite a slight decline in reported revenue, the company saw organic growth in service and B2B revenues, reflecting its successful portfolio transformation and strong customer engagement.

Telefónica Completes Sale of Otecel to Millicom

On October 30, 2025, Telefónica announced the completion of the sale of its Ecuadorian subsidiary, Otecel S.A., to Millicom Spain, S.L. for USD 380 million. This transaction, part of Telefónica’s strategy to reduce its exposure in Hispanoamerica, resulted in a reduction of the company’s net financial debt by approximately EUR 273 million, aligning with its asset portfolio management policy.

Telefónica Announces Board Restructuring and New Appointments

On October 22, 2025, Telefónica announced changes in its Board of Directors and its committees. Mr. Francisco Javier de Paz Mancho resigned from his director position to take on executive responsibilities within the Telefónica Group. Mr. César Mascaraque Alonso was appointed as an Independent Director, and Ms. Ana María Sala Andrés was appointed as Chairwoman of the Sustainability and Regulation Committee. These changes reflect Telefónica’s strategic focus on strengthening its governance and leadership structure.

Telefónica Completes Sale of Uruguayan Subsidiary to Millicom

On October 7, 2025, Telefónica announced the completion of the sale of its subsidiary, Telefónica Móviles del Uruguay S.A., to Millicom Spain, S.L. for USD 440 million. This transaction is part of Telefónica’s strategy to manage its asset portfolio and reduce its financial exposure in Hispanoamerica, resulting in a reduction of the company’s net financial debt by approximately EUR 384 million.