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Telefonica (TEF)
NYSE:TEF
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Telefonica
(NYSE:TEF)
Rating:60Neutral
Price Target:
$5.50
▼(-2.65% Downside)
Telefonica (TEF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.64B
Dividend Yield6.31%
Average Volume (3M)580.76K
Price to Earnings (P/E)―
Beta (1Y)0.07
Revenue Growth-4.73%
EPS Growth-251.31%
CountryUS
Employees100,870
SectorCommunication Services
Sector Strength91
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.08
Shares Outstanding5,670,161,600
10 Day Avg. Volume583,915
30 Day Avg. Volume580,764
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.69
Enterprise Value/Revenue2.19
Enterprise Value/Gross Profit2.19
Enterprise Value/Ebitda6.75
Forecast
1Y Price Target
$5.50Price Target Upside-2.65% Downside
Rating ConsensusHold
Number of Analyst Covering1
Telefonica Business Overview & Revenue Model
Company DescriptionTelefonica (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 MoneyTelefonica 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 Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q1-2025)
| % Change Since: 7.01%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
Telefonica's earnings call for the first quarter of 2025 highlighted strong operational performance in its core markets such as Spain and Brazil, as well as progress in strategic simplification in Hispam. However, challenges remain with forex impacts on financial metrics and operational difficulties in the Hispam region. While there are clear positive trends in customer engagement and network expansion, the financial performance is somewhat dampened by external factors like forex and seasonality in cash flow.Q1-2025 Updates
Positive Updates
Strong Customer Engagement and Network Expansion
NPS scores reached new highs, with Spain leading the market. Fiber was rolled out to over 1.5 million premises, and 5G coverage reached 75% in core markets.
Commercial and Financial Strength in Spain
Telefonica Spain showed strong commercial momentum with customer growth in all accesses for the seventh consecutive quarter. Domestic revenue grew by 1.7% year-on-year.
Resilient Performance in Brazil
Vivo reached its largest customer base with revenue rising 6%, above inflation, driven by higher ARPU and growth in mobile contracts and fiber accesses.
Operational Efficiency in Germany
Telefonica Deutschland maintained robust commercial momentum with a stable EBITDA margin year-on-year and a 4.8% growth in EBITDA minus CapEx.
Strategic Simplification in Hispam
Completed the sale of Telefonica Argentina for €1.2 billion, and signed a binding agreement to sell Telefonica Colombia.
Positive Trends in Telefonica Tech
Telefonica Tech increased revenue by 6.6% year-on-year, with commercial activity growing and bookings up by 7%.
Negative Updates
Impact of Forex on Financial Metrics
Reported results were negatively affected by forex, impacting the financial metrics despite organic growth in main metrics.
Challenges in Hispam Region
EBITDA minus CapEx fell by 31% due to lower EBITDA and higher lease costs, primarily in Colombia.
Seasonality Affecting Free Cash Flow
Free cash flow from continuing operations totaled minus €205 million, affected by seasonality in working capital, leases, and financial payments.
Company Guidance
In the recent Telefonica results conference call for the first fiscal period of 2025, significant metrics and strategic guidance were shared. The company highlighted robust operational performance across its core markets of Spain, Brazil, and Germany, with an emphasis on customer engagement, network transformation, and efficiency. Telefonica achieved notable milestones, including a record high Net Promoter Score (NPS) and expanded fiber and 5G coverage, reaching 75% in core markets. The company also made significant strides in network virtualization and legacy service shutdowns, optimizing operations by completing the copper switch-off in Spain and shutting down 3G in Germany and 2G in Uruguay. Financially, Telefonica reiterated its 2025 guidance, expecting revenue, EBITDA, and EBITDA minus CapEx to grow organically, with a stable free cash flow similar to 2024 figures, despite forex challenges. The company reduced net debt and maintained a solid liquidity position, with its net debt to EBITDA ratio at 2.67 times. Additionally, strategic moves included the sale of operations in Argentina and Peru and a pending agreement in Colombia, highlighting the company's focus on financial flexibility and simplification. The strategic review, expected to conclude in the second half of the year, will further refine the company’s operational focus and financial strategy.Telefonica Financial Statement Overview
Summary
Telefonica's financial statements show stable cash flows and reasonable leverage, but there are significant profitability issues. The income statement reports negative net income despite stable gross margins, while the balance sheet indicates negative equity returns despite balanced leverage. Cash flow performance is strong, signaling effective cash management, yet profitability remains a critical concern.Income Statement
Telefonica's TTM revenue has declined compared to the previous year, exhibiting negative growth. The gross profit margin remains intact at 100% due to matching revenue and cost structures, but the net profit margin is negative, indicating profitability challenges. EBIT and EBITDA margins show stability, although they are moderate. Overall, the income statement reflects mixed results, with a strong gross margin but concerning net losses.55
Neutral
Balance Sheet
Telefonica's debt-to-equity ratio is moderate, reflecting a balanced leverage structure. However, the company's return on equity is negative due to net losses, posing profitability concerns. The equity ratio indicates a substantial proportion of assets financed by equity, suggesting some stability. Overall, the balance sheet shows stability in leverage but highlights profitability issues.60
Neutral
Cash Flow
The company's free cash flow has shown positive growth, reflecting efficient capital management. The operating cash flow to net income ratio is strong, indicating robust cash generation relative to net income. However, the free cash flow to net income ratio is less favorable due to negative net income. Overall, cash flow metrics demonstrate strong cash generation but are impacted by profitability challenges.70
Positive
| 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 | 5.29B |
| Total Liabilities | 73.39B | 77.75B | 77.23B | 77.93B | 80.53B | 86.79B |
| Stockholders Equity | 17.28B | 19.35B | 21.85B | 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
Positive
5.65
Price Trends
5.28
Positive
5.05
Positive
4.61
Positive
Market Momentum
0.10
Negative
68.87
Neutral
91.69
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 5.65 is above the 20-day moving average (MA) of 5.39, above the 50-day MA of 5.28, and above the 200-day MA of 4.61, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 68.87 is Neutral, neither overbought nor oversold. The STOCH value of 91.69 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $35.16B | 29.75 | 9.95% | 3.67% | 3.12% | 3.14% | |
74 Outperform | $58.13B | 20.21 | 14.41% | 2.74% | -0.64% | 56.92% | |
74 Outperform | $20.20B | 13.99 | 17.71% | 6.43% | -5.13% | -5.90% | |
72 Outperform | $19.77B | 19.77 | 8.20% | 3.53% | -6.51% | -0.21% | |
66 Neutral | ¥503.10B | 16.55 | 1.07% | 2.17% | 6.46% | -14.78% | |
60 Neutral | $28.08B | 9.21 | -7.17% | 4.23% | 0.89% | -494.16% | |
60 Neutral | $31.64B | ― | -3.55% | 6.31% | -4.73% | -251.31% |
* Communication Services Sector Average
Performance Comparison
TEF
Telefonica
5.63
1.33
30.93%
AMX
America Movil
19.02
2.34
14.03%
CHT
Chunghwa Telecom Co
45.79
8.43
22.56%
TLK
PT Telekomunikasi Indonesia Tbk
19.78
1.63
8.98%
VIV
Telefonica Brasil
12.29
3.22
35.50%
VOD
Vodafone
11.71
2.63
28.96%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.