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Telefonica Brasil (VIV)
NYSE:VIV
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Telefonica Brasil
(NYSE:VIV)
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Rating:72Outperform
Price Target:
$14.00
â–²(13.73% Upside)
Telefonica Brasil's strong financial performance and positive earnings call sentiment are key strengths, driving the overall score. However, technical indicators suggest caution due to overbought conditions, and valuation metrics indicate potential overvaluation. These factors collectively result in a moderate overall stock score.
Positive Factors
Revenue Growth
The consistent revenue growth, particularly in mobile and fiber segments, indicates strong market demand and effective business strategies, supporting long-term financial health.
Cash Flow Generation
Robust cash flow generation enhances financial flexibility, enabling strategic investments and shareholder returns, which are crucial for sustaining growth and stability.
Market Position
Strong postpaid growth solidifies Telefonica Brasil's market position, reflecting customer loyalty and competitive advantage in the Brazilian telecom market.
Negative Factors
Increased Service Costs
Rising service costs can pressure margins and profitability, potentially impacting the company's ability to maintain its current growth trajectory and financial performance.
Higher Personnel Expenses
Increased personnel expenses may strain operational efficiency, necessitating careful cost management to preserve margin sustainability and competitive positioning.
Challenges in Net Income
Challenges in achieving expected net income levels highlight potential financial management issues, which could affect investor confidence and long-term financial stability.
Telefonica Brasil (VIV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.02B
Dividend Yield4.65%
Average Volume (3M)704.93K
Price to Earnings (P/E)19.9
Beta (1Y)0.32
Revenue Growth-6.51%
EPS Growth-0.21%
CountryUS
Employees32,759
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.15
Shares Outstanding1,613,273,300
10 Day Avg. Volume584,009
30 Day Avg. Volume704,931
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 Cap1.02
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit0.69
Enterprise Value/Ebitda0.95
Forecast
1Y Price Target
$12.70Price Target Upside3.17% 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: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
Vivo reported strong performance in its mobile and fiber segments with significant revenue and EBITDA growth, alongside robust free cash flow and shareholder returns. However, the company faced challenges with increased service costs, declining handset sales, and higher personnel expenses. Despite these challenges, the overall performance was positive, with continued growth in B2B and notable ESG achievements.Q2-2025 Updates
Positive Updates
Strong Mobile Segment Performance
Postpaid growth of 7% year-over-year, now comprising 67% of the mobile customer base.
Impressive Fiber Expansion
Connected homes increased by 12.6% year-over-year, reaching 7.4 million accesses.
Revenue and EBITDA Growth
Total revenue rose 7.2% year-over-year, and EBITDA grew 8.8% with a margin of 40.5%.
Robust Free Cash Flow and Shareholder Returns
Operating cash flow of BRL 7.3 billion for the first half of 2025, up 12.5% year-over-year, with BRL 5.2 billion paid to shareholders.
B2B Segment Growth
B2B revenues grew 13.3% year-over-year, with digital B2B revenues up 31.3%.
ESG Achievements
Vivo was named Company of the Year in Exame magazine's best in ESG Awards, and electronic waste collection increased by 17%.
Negative Updates
Increased Service Costs
Cost of service and goods sold increased by 8.3%, mainly driven by a 15.7% rise in service costs.
Decline in Handset Sales
Cost of goods sold declined by 2.3% due to a decrease in handset and consumer electronics sales.
Challenges in Net Income
Net income came in below consensus, with financial expenses as a main detractor.
Higher Personnel Expenses
Personnel expenses rose 8.8% due to annual wage adjustments and increased headcount in growth areas.
Company Guidance
In the Second Quarter of 2025, Vivo demonstrated strong operational and financial performance, highlighted by a 7.1% rise in total revenue, driven by high single-digit growth in both mobile services and fixed revenues. Postpaid mobile services grew 7% year-over-year, comprising 67% of the total mobile customer base, while fiber connections expanded by 12.6% to 7.4 million accesses. The company reported an 8.8% increase in EBITDA, with a margin of 40.5%, and generated BRL 7.3 billion in operating cash flow in the first half of 2025, up 12.5% year-over-year. Vivo's strategic focus on high-value offerings and service convergence was evident as postpaid and FTTH revenues grew by 10.9% and 10.4%, respectively, accounting for over 72% of service revenues. The company also maintained its commitment to shareholder remuneration, having paid BRL 5.2 billion to shareholders thus far in 2025.Telefonica Brasil Financial Statement Overview
Summary
Telefonica Brasil demonstrates strong financial performance with robust revenue and profit growth, healthy operational margins, and solid cash flow generation. The balance sheet is stable with manageable debt levels, though attention to revenue growth and liability management is necessary.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
Neutral
12.31
Price Trends
12.02
Positive
11.23
Positive
9.78
Positive
Market Momentum
0.12
Positive
48.37
Neutral
35.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VIV, the sentiment is Neutral. The current price of 12.31 is below the 20-day moving average (MA) of 12.44, above the 50-day MA of 12.02, and above the 200-day MA of 9.78, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 48.37 is Neutral, neither overbought nor oversold. The STOCH value of 35.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | 10.38B | 16.54 | 14.43% | 5.60% | -7.99% | 2.16% | |
74 Outperform | 18.65B | 13.30 | 17.30% | 6.89% | -5.13% | -5.90% | |
72 Outperform | $20.02B | 19.95 | 8.20% | 4.65% | -6.51% | -0.21% | |
67 Neutral | 8.32B | 11.64 | 11.13% | 4.60% | -4.74% | -16.57% | |
60 Neutral | 27.05B | -6.30 | -7.90% | 4.39% | 0.89% | -494.16% | |
52 Neutral | 28.70B | -11.35 | -13.79% | 7.12% | -4.73% | -251.31% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
Performance Comparison
VIV
Telefonica Brasil
12.31
2.62
27.04%
AMX
America Movil
20.50
4.60
28.93%
TLK
PT Telekomunikasi Indonesia Tbk
18.69
-0.41
-2.15%
TEF
Telefonica
5.01
0.37
7.97%
TIMB
TIM
21.29
5.48
34.66%
VOD
Vodafone
11.27
1.65
17.15%
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.