Telefonica (TEF) AI Stock Analysis

• Market Cap: $29.81B
• Dividend Yield: 1.04%
• Average Volume (3M): 539.42K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.10
• Revenue Growth: -2.29%
• EPS Growth: -182.68%
• Country: US
• Employees: 100,870
• Sector: Communication Services
• Sector Strength: 71
• Industry: Telecommunications Services
• EPS (TTM): N/A
• Shares Outstanding: 5,670,161,600
• 10 Day Avg. Volume: 552,998
• 30 Day Avg. Volume: 539,420
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• 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: $4.70
• Price Target Upside: -10.31% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 59 Neutral
• Price Target: $5.50 ▲(4.96%Upside)

Telefonica's overall score reflects a mix of strengths and challenges. While operational efficiency and positive technical indicators provide support, financial risks from high leverage and negative net income weigh heavily. Earnings call insights show strategic focus but also highlight revenue and forex challenges, affecting the overall outlook.

Telefonica Business Overview & Revenue Model

Company Description

Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Europe and Latin America. The company's mobile and related services and products comprise mobile voice, value added, mobile data and Internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services. Its fixed telecommunication services include PSTN lines; ISDN accesses; public telephone services; local, domestic, and international long-distance and fixed-to-mobile communications; corporate communications; supplementary value-added services; video telephony; intelligent network; and telephony information services, as well as leases and sells handset equipment. The company also provides Internet and broadband multimedia services comprising Internet service provider, portal and network, retail and wholesale broadband access, narrowband switched access, high-speed Internet through fibre to the home, and voice over Internet protocol services. In addition, it offers leased line, virtual private network, fibre optics, web hosting and application, outsourcing and consultancy, desktop, and system integration and professional services. Further, the company offers wholesale services for telecommunication operators, including domestic interconnection and international wholesale services; leased lines for other operators; and local loop leasing services, as well as bit stream services, wholesale line rental accesses, and leased ducts for other operators' fiber deployment. Additionally, it provides video/TV services; smart connectivity and services, and consumer IoT products; financial and other payment, security, cloud computing, advertising, big data, and digital telco experience services; virtual assistants; digital home platforms; and Movistar Home devices. It also offers online telemedicine, home insurance, music streaming, and consumer loan services. The company was incorporated in 1924 and is headquartered in Madrid, Spain.

How the Company Makes Money

Telefónica generates revenue through multiple streams, primarily from its telecommunications services. The company earns money by providing fixed-line and mobile telephony services, broadband internet, and pay-TV subscriptions. Mobile services, including voice and data plans, constitute a significant portion of their revenue, especially in markets like Spain, Germany, and Latin America. Additionally, Telefónica monetizes its digital services, which include cloud computing, cybersecurity, and IoT solutions. The company also benefits from strategic partnerships and collaborations with technology firms to expand its service offerings and improve infrastructure. Furthermore, Telefónica engages in wholesale operations, selling network capacity to other telecommunications providers, which contributes to its overall earnings.

Telefonica Financial Statement Overview

Summary

Telefonica demonstrates strong operational efficiency with robust gross profit and EBITDA margins. However, negative net income and a high debt-to-equity ratio pose significant financial risks. The decrease in free cash flow and operating cash flow further highlights potential liquidity challenges.

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.

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.

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.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Telefonica Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.24
• 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 TEF, the sentiment is Neutral. The current price of 5.24 is below the 20-day moving average (MA) of 5.26, above the 50-day MA of 5.17, and above the 200-day MA of 4.54, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 50.44 is Neutral, neither overbought nor oversold. The STOCH value of 71.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TEF.

Telefonica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TLK	79 Outperform	$17.11B	11.75	16.28%	5.80%	-5.14%	-7.47%
VIV	77 Outperform	$17.75B	17.75	7.95%	0.36%	-5.69%	-0.05%
AMX	77 Outperform	$56.51B	19.56	14.41%	2.87%	-0.64%	56.92%
CHT	73 Outperform	$33.93B	28.65	9.59%	0.07%	3.12%	3.06%
VOD	62 Neutral	$27.15B	9.21	-7.17%	4.44%	0.89%	-494.16%
Sector *	62 Neutral	$41.98B	-1.92	-12.06%	3.47%	2.10%	-71.01%
TEF	59 Neutral	$29.81B	―	-0.55%	1.04%	-2.29%	-182.68%