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Telefonica Brasil (VIV)
NYSE:VIV
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Telefonica Brasil
(NYSE:VIV)
77Outperform
Positive Factors
Financial Performance
Vivo reported positive 3Q results across the board, meeting above-consensus numbers with better underlining trends.
Operational Efficiency
Concession migration should be positive for Vivo, allowing optimization of capex/opex and migration of customers to other technologies.
Shareholder Confidence
Vivo announced a new buyback program of up to R$1.8bn in shares, indicating confidence in the company's value.
Negative Factors
Mobile Revenue
Vivo reported soft results due to a deceleration in mobile and pressured margins.
Telefonica Brasil (VIV) vs. S&P 500 (SPY)
Market Cap
$14.94B
Dividend Yield2.77%
Average Volume (3M)914.04K
Price to Earnings (P/E)14.6
Beta (1Y)0.45
Revenue Growth-0.47%
EPS Growth1.69%
CountryUS
Employees32,759
SectorCommunication Services
Sector Strength74
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.62
Shares Outstanding1,630,643,700
10 Day Avg. Volume848,542
30 Day Avg. Volume914,038
Financial Highlights & Ratios
PEG Ratio8.64
Price to Book (P/B)N/A
Price to Sales (P/S)1.47
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.09Price Target Upside-2.26% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Telefonica Brasil Business Overview & Revenue Model
Company DescriptionTelefônica Brasil S.A., together with its subsidiaries, provides mobile and fixed telecommunications services to residential and corporate customers in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G as well as mobile value-added services and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through direct to home satellite technology, IPTV, and cable, as well as pay-per-view and video on demand services; network services, such as rental of facilities; other services comprising internet access, private network connectivity, computer equipment leasing, extended service, caller identification, voice mail, cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and security and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. It markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and outbound tele sales. The company was formerly known as Telecomunicações de São Paulo S.A. - TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.
How the Company Makes MoneyTelefonica Brasil primarily generates revenue through its telecommunications services, with a significant portion coming from its mobile segment, which includes voice, data, and value-added services such as messaging and content. The company also earns revenue from its fixed-line services, offering broadband internet, fixed voice, and pay-TV services. Another key revenue stream is its corporate solutions, providing integrated communication services to businesses. In addition to its core offerings, Telefonica Brasil benefits from strategic partnerships and collaborations that enhance its service portfolio and expand its customer base. The company's extensive network infrastructure and customer-centric service models are instrumental in driving its earnings.
Telefonica Brasil Financial Statement Overview
Summary
Telefonica Brasil presents a strong financial position with consistent revenue and profit growth, supported by effective cost management and operational efficiency. The balance sheet remains stable, with a sound equity base and manageable debt levels. Cash flows are robust, providing ample liquidity for operations and strategic investments. While the company shows commendable financial health, monitoring debt levels and sustaining growth momentum will be key to future success.Income Statement
Telefonica Brasil has shown strong revenue growth with a consistent upward trend from 2020 to 2024, achieving a Revenue Growth Rate of 7.19% in the last year. The Gross Profit Margin is robust, consistently above 40%, indicating efficient production and service delivery. Net Profit Margin has improved to 9.94%, reflecting effective cost management and profitability enhancements. EBIT and EBITDA margins are healthy, demonstrating strong operational efficiency and capacity to generate cash. Overall, the income statement reflects solid growth and profitability.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio has been stable, suggesting a balanced approach to leveraging debt for growth without over-reliance. Return on Equity stands at 7.95%, which indicates reasonable profitability on shareholders' investments. The Equity Ratio is strong, with shareholders' equity constituting over 55% of total assets, pointing to a stable financial structure. However, the increase in total debt over recent years warrants attention to maintain financial flexibility.78
Positive
Cash Flow
Telefonica Brasil demonstrates robust cash flow generation with a strong Operating Cash Flow to Net Income ratio, reflecting efficient conversion of income into cash. The Free Cash Flow to Net Income ratio is healthy, supporting dividend payments and potential investments. Free Cash Flow Growth Rate is positive, indicating improving cash generation capability. The company efficiently manages its capital expenditures, balancing growth investments with cash flow preservation.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 55.85B | 52.10B | 48.04B | 44.03B | 43.13B |
| Gross Profit | ||||
| 24.49B | 22.68B | 20.61B | 36.04B | 30.07B |
| EBIT | ||||
| 8.67B | 7.92B | 6.60B | 7.09B | 6.58B |
| EBITDA | ||||
| 21.54B | 19.52B | 19.82B | 19.00B | 18.01B |
| Net Income Common Stockholders | ||||
| 5.55B | 5.03B | 4.09B | 6.24B | 4.77B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 6.69B | 4.36B | 2.27B | 6.45B | 5.76B |
| Total Assets | ||||
| 124.94B | 120.74B | 119.12B | 115.74B | 108.74B |
| Total Debt | ||||
| 20.75B | 18.74B | 19.30B | 16.93B | 13.24B |
| Net Debt | ||||
| 14.06B | 14.38B | 17.03B | 10.48B | 7.48B |
| Total Liabilities | ||||
| 55.14B | 51.11B | 50.67B | 45.66B | 39.18B |
| Stockholders Equity | ||||
| 69.73B | 69.57B | 68.40B | 70.01B | 69.56B |
| Cash Flow | Free Cash Flow | |||
| 10.55B | 9.97B | 9.05B | 8.78B | 11.05B |
| Operating Cash Flow | ||||
| 19.88B | 18.79B | 18.94B | 18.07B | 19.34B |
| Investing Cash Flow | ||||
| -8.91B | -7.85B | -14.20B | -8.13B | -6.41B |
| Financing Cash Flow | ||||
| -8.63B | -8.85B | -8.91B | -9.26B | -10.56B |
Telefonica Brasil Technical Analysis
Positive
9.30
Price Trends
8.67
Positive
8.34
Positive
8.59
Positive
Market Momentum
0.06
Negative
53.04
Neutral
49.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VIV, the sentiment is Positive. The current price of 9.3 is above the 20-day moving average (MA) of 8.74, above the 50-day MA of 8.67, and above the 200-day MA of 8.59, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 53.04 is Neutral, neither overbought nor oversold. The STOCH value of 49.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VIV.
Telefonica Brasil Risk Analysis
Telefonica Brasil disclosed 41 risk factors in its most recent earnings report. Telefonica Brasil 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 Brasil Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $305.86B | 27.72 | 17.93% | 1.14% | 3.62% | 38.24% | |
77 Outperform | $14.94B | 14.58 | 7.95% | 2.77% | -0.47% | 1.69% | |
76 Outperform | $205.30B | 19.17 | 10.54% | 3.88% | -0.08% | -24.48% | |
73 Outperform | $192.05B | 11.00 | 18.27% | 5.88% | 0.61% | 50.39% | |
67 Neutral | $45.00B | 28.97 | 7.78% | 3.37% | 3.15% | -63.12% | |
64 Neutral | $5.90B | ― | -17.68% | ― | 32.25% | 20.56% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% |
* Communication Services Sector Average
Performance Comparison
VIV
Telefonica Brasil
9.30
-0.31
-3.23%
AMX
America Movil
15.01
-3.06
-16.93%
T
AT&T
28.60
11.99
72.19%
VZ
Verizon
45.62
5.86
14.74%
TMUS
T Mobile US
267.89
108.53
68.10%
S
SentinelOne
17.91
-3.95
-18.07%
Telefonica Brasil Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 3.45% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
Vivo demonstrated strong growth in mobile and fiber segments, increased shareholder remuneration, and notable ESG achievements. However, challenges persist with prepaid revenue softness, fixed voice migration costs, and rising operating expenses.Highlights
Strong Mobile and Fiber Growth
Vivo reached 66.5 million postpaid access in 2024 with a growth of 7.6%. The number of homes connected to fiber grew 12.7%, totaling 7 million access, contributing to the largest customer base in company history with over 116 million access.
Revenue and EBITDA Growth
Total revenues increased by 7.7% in Q4, with mobile revenues growing 7% and fixed revenues up 8%. EBITDA increased by 7.8% year-over-year.
Shareholder Remuneration and Cash Flow
Vivo paid over BRL5.8 billion to shareholders, a 22% increase year-over-year, representing 105% of net income. Operating cash flow grew 11% year-over-year to BRL13.7 billion, representing 24.6% of total revenues.
ESG Accomplishments
Vivo joined the Dow Jones Best-in-Class World Index, being the only Brazilian telco on the list. The Vivo Recicle program achieved a new record of 37 tonnes collected, three times last year's amount.
Lowlights
Prepaid Revenue Challenges
Prepaid segment showed a softer performance in Q4 due to migration to hybrid plans and absence of new price increases, impacting prepaid revenue growth.
Fixed Voice Migration Costs
The fixed voice migration process involves significant OpEx and CapEx, with negative free cash flow from copper-based services impacting overall business profitability.
Rising Operating Expenses
Total OpEx grew 7.7% year-over-year, with commercial and infrastructure costs increasing due to preparation for the fixed voice migration and high commercial activity.
Company Guidance
In Vivo's Fourth Quarter 2024 earnings call, the company reported robust growth across various metrics, highlighting a solid overall performance. They achieved a 7.6% growth in postpaid access, reaching 66.5 million, and a 12.7% increase in fiber connections, totaling 7 million. Vivo's total customer base surpassed 116 million accesses, marking the largest in its history. Total revenues climbed by 7.7% in the fourth quarter, with mobile revenues growing 7% and fixed revenues by 8%. This revenue expansion contributed to a 7.8% year-over-year increase in EBITDA. The company invested BRL 9.2 billion in 2024, which resulted in an operating cash flow of BRL 13.7 billion, up 11% year-over-year, representing nearly 25% of total revenues. Shareholder remuneration was significant, with BRL 5.8 billion paid out, reflecting a 22% growth year-over-year and amounting to 105% of the net income, aligning with Vivo's guidance for the upcoming years.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.