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Telefonica Brasil (VIV)
NYSE:VIV
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Telefonica Brasil
(NYSE:VIV)
Rating:79Outperform
Price Target:
$12.50
▲(2.71% Upside)
Positive Factors
Corporate Strategy
Vivo announced a new buyback program of up to R$1.8bn in shares, indicating confidence in the company's value.
Earnings
Vivo reported positive 3Q results across the board, meeting above-consensus numbers with better underlying trends.
Financial Performance
Vivo's board of directors approved a proposal for a R$2bn capital reduction, which is a positive sign for higher dividend payouts.
Negative Factors
Operational Challenges
Vivo reported soft results due to a deceleration in mobile and pressured margins.
Telefonica Brasil (VIV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.64B
Dividend Yield3.63%
Average Volume (3M)1.18M
Price to Earnings (P/E)19.5
Beta (1Y)0.30
Revenue Growth-6.51%
EPS Growth-0.21%
CountryUS
Employees32,759
SectorCommunication Services
Sector Strength90
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding1,613,273,300
10 Day Avg. Volume1,023,292
30 Day Avg. Volume1,179,800
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit0.69
Enterprise Value/Ebitda0.95
Forecast
1Y Price Target
$12.67Price Target Upside4.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 generates revenue through multiple streams, including mobile services, fixed broadband, and pay television subscriptions. The majority of its income comes from mobile telecommunications, where it offers a variety of prepaid and postpaid plans to individual consumers and businesses. Additionally, the company earns revenue from fixed-line services, including voice and broadband internet, catering to residential and corporate clients. VIV also monetizes its network infrastructure through partnerships and wholesale agreements with other telecom operators. Significant partnerships, such as those with content providers for bundled services, and investments in digital transformation initiatives, further contribute to its earnings. Furthermore, the company capitalizes on the growing demand for data services, offering enhanced mobile internet and value-added services that drive customer retention and acquisition.
Telefonica Brasil Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: 8.47%|
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in key areas such as postpaid mobile, fiber expansion, and B2B segments, supported by strategic initiatives. However, there were concerns about weaker mobile net adds and increased personnel and financial expenses. Overall, the company's performance was positive, driven by robust growth metrics and strategic focus.Q2-2025 Updates
Positive Updates
Strong Postpaid Growth in Mobile Segment
Postpaid mobile segment grew by 7% year-over-year, now making up 67% of the total mobile customer base.
Expansion in Fiber Connected Homes
Fiber connected homes expanded by 12.6% compared to last year, reaching 7.4 million accesses.
Revenue and EBITDA Growth
Total revenue increased by 7.1%, and EBITDA grew by 8.8% year-over-year with a margin of 40.5%.
Operating Cash Flow Increase
Operating cash flow was BRL 7.3 billion for the first half of 2025, up 12.5% year-over-year.
B2B Revenue Surge
B2B segment revenue grew by 13.3% year-over-year, with digital B2B growing by 31.3%.
ESG Achievements
Vivo recognized for leadership in sustainability, named Company of the Year in Exame magazine's ESG Awards.
Negative Updates
Slower Mobile Customer Net Adds
Net adds in mobile were weaker than historical performance, prompting questions about strategies to improve net adds.
High Personnel Expenses
Personnel expenses rose by 8.8% due to annual wage adjustments and higher headcount in digital and IT areas.
Financial Expenses Impacting Net Income
Net income was slightly below consensus, impacted by financial expenses and some seasonality effects.
Company Guidance
In the second quarter of 2025, Vivo demonstrated strong financial and operational performance, highlighted by several key metrics. The company achieved a 7% year-over-year growth in its postpaid mobile segment, which now makes up 67% of its total mobile customer base. Fiber connections saw a 12.6% increase, reaching 7.4 million accesses. Total revenue rose by 7.1%, driven by high single-digit growth in both mobile services and fixed revenues. EBITDA grew by 8.8% year-over-year with a margin of 40.5%, reflecting effective cost management and operational efficiency. Vivo's operating cash flow for the first half of 2025 reached BRL 7.3 billion, marking a 12.5% increase compared to the previous year. The company has already returned BRL 5.2 billion to shareholders in 2025. Total revenue for the quarter was BRL 14.6 billion, up 7.2% year-over-year, with postpaid and FTTH revenues growing by 10.9% and 10.4%, respectively. These segments now account for over 72% of service revenues, underscoring Vivo's focus on high-value offerings. The B2B segment reported a robust 13.3% revenue growth, with digital B2B services increasing by 31.3%. Additionally, Vivo's ESG initiatives continue to gain recognition, further enhancing its reputation in sustainability and social responsibility.Telefonica Brasil Financial Statement Overview
Summary
Telefonica Brasil's financial performance is robust, characterized by steady revenue and profit growth, coupled with strong operational margins. The balance sheet reflects financial stability with sound equity backing and manageable debt levels. Cash flow generation remains a key strength, supporting operational and strategic initiatives. However, careful attention to revenue growth and liability management will be essential for sustained performance.Income Statement
Telefonica Brasil shows strong revenue growth with a consistent upward trend from 2020 to TTM 2025, driven by robust gross and net profit margins. The Gross Profit Margin remained steady around 43-44% in recent years, and the Net Profit Margin increased to 10.1% in TTM 2025 from 9.9% in 2024. EBIT and EBITDA margins are healthy, with EBITDA Margin at 37.9% for TTM 2025, reflecting operational efficiency. However, the decline in revenue growth rate from 9.2% in 2022 to 1.5% in 2024 needs monitoring.85
Very Positive
Balance Sheet
The balance sheet is solid, with a Debt-to-Equity ratio of 0.30 in TTM 2025, indicating manageable leverage. The company maintains a strong equity position with an Equity Ratio of 53.8%, highlighting financial stability. Return on Equity improved to 8.4% in TTM 2025, up from 8.0% in 2024, showcasing effective use of equity. However, the relatively high total liabilities might pose risks if not managed properly.78
Positive
Cash Flow
Cash flow analysis reveals a robust Operating Cash Flow to Net Income Ratio of 3.51 in TTM 2025, indicating strong cash generation capabilities. The Free Cash Flow has shown growth, although the Free Cash Flow Growth Rate slightly decreased in TTM 2025. The Free Cash Flow to Net Income Ratio of 1.80 signifies efficient cash management. Continued focus on managing capital expenditures is crucial for sustaining cash flow strength.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 56.69B | 55.85B | 52.10B | 48.04B | 44.03B | 43.13B |
| Gross Profit | 29.60B | 24.49B | 22.68B | 20.61B | 36.04B | 30.07B |
| EBITDA | 21.49B | 21.54B | 19.52B | 19.82B | 19.00B | 18.01B |
| Net Income | 5.71B | 5.55B | 5.03B | 4.09B | 6.24B | 4.77B |
Balance Sheet | ||||||
| Total Assets | 126.61B | 124.94B | 120.74B | 119.12B | 115.74B | 108.74B |
| Cash, Cash Equivalents and Short-Term Investments | 8.19B | 6.69B | 4.36B | 2.27B | 6.45B | 5.76B |
| Total Debt | 20.56B | 20.75B | 18.74B | 19.30B | 16.93B | 13.24B |
| Total Liabilities | 58.46B | 55.14B | 51.11B | 50.67B | 45.66B | 39.18B |
| Stockholders Equity | 68.07B | 69.73B | 69.57B | 68.40B | 70.01B | 69.56B |
Cash Flow | ||||||
| Free Cash Flow | 10.30B | 10.55B | 9.97B | 9.05B | 8.78B | 11.05B |
| Operating Cash Flow | 20.04B | 19.88B | 18.79B | 18.94B | 18.07B | 19.34B |
| Investing Cash Flow | -9.39B | -8.91B | -7.85B | -14.20B | -8.13B | -6.41B |
| Financing Cash Flow | -9.22B | -8.63B | -8.85B | -8.91B | -9.26B | -10.56B |
Telefonica Brasil Technical Analysis
Positive
12.17
Price Trends
11.15
Positive
10.20
Positive
9.23
Positive
Market Momentum
0.32
Negative
71.53
Negative
85.90
Negative
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 12.17 is above the 20-day moving average (MA) of 11.44, above the 50-day MA of 11.15, and above the 200-day MA of 9.23, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 71.53 is Negative, neither overbought nor oversold. The STOCH value of 85.90 is Negative, 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 2 New Risks
1.
Changes in taxes and other assessments may adversely affect us and our shareholders. Q4, 2022
2.
The ongoing war between Russia and Ukraine may have a material adverse effect on the global and Brazilian economies as well as on us. Q4, 2022
Telefonica Brasil Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $19.64B | 19.52 | 8.20% | 3.63% | -6.51% | -0.21% | |
79 Outperform | $9.91B | 15.67 | 13.78% | 5.84% | -7.99% | 2.16% | |
74 Outperform | $19.38B | 13.46 | 17.71% | 6.31% | -5.13% | -5.90% | |
68 Neutral | $8.62B | 12.14 | 11.08% | 4.40% | -4.74% | -16.23% | |
62 Neutral | $28.22B | 9.21 | -7.17% | 4.25% | 0.89% | -494.16% | |
60 Neutral | $31.02B | ― | -3.55% | 6.54% | -4.73% | -251.31% | |
60 Neutral | $43.99B | 4.24 | -10.43% | 4.00% | 2.31% | -34.39% |
* Communication Services Sector Average
Performance Comparison
VIV
Telefonica Brasil
12.17
3.36
38.14%
TLK
PT Telekomunikasi Indonesia Tbk
20.39
3.02
17.39%
SKM
Sk Telecom
22.54
-0.02
-0.09%
TEF
Telefonica
5.55
1.32
31.21%
TIMB
TIM
20.43
5.42
36.11%
VOD
Vodafone
11.65
2.54
27.88%
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.