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Telefonica SA (TEF)
:TEF
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Telefonica
(NYSE:TEF)
64Neutral
Telefonica (TEF) vs. S&P 500 (SPY)
Market Cap
$26.08B
Dividend Yield5.25%
Average Volume (3M)702.27K
Price to Earnings (P/E)―
Beta (1Y)0.28
Revenue Growth1.18%
EPS GrowthN/A
CountryUS
Employees100,870
SectorCommunication Services
Sector Strength83
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.00
Shares Outstanding5,670,161,600
10 Day Avg. Volume786,219
30 Day Avg. Volume702,274
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.58
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
$4.45Price Target Upside-2.41% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Telefonica Business Overview & Revenue Model
Company DescriptionTelefónica S.A. is a multinational telecommunications company headquartered in Madrid, Spain. It is one of the largest telephone operators and mobile network providers in the world. The company operates in several sectors, primarily focusing on fixed and mobile telephony, broadband, and digital services for both consumer and enterprise markets. With a strong presence in Europe and Latin America, Telefónica offers a wide range of products and services including voice, data, internet, and digital solutions, positioning itself as a leader in the telecommunications industry.
How the Company Makes MoneyTelefónica generates revenue through multiple streams, primarily through its fixed and mobile telephony services. The company earns income from providing voice services, mobile data, and broadband internet access, which are offered to both individual consumers and businesses. Subscription fees, usage charges, and data packages constitute significant portions of Telefónica's earnings. Additionally, the company capitalizes on digital services and solutions, such as cloud computing, cybersecurity, and IoT (Internet of Things), which cater to the growing demand for digital transformation in various industries. Partnerships with content providers enhance their offerings in entertainment and media, further contributing to their revenue. Telefónica's strategic investments in network infrastructure and technology innovation also play a crucial role in maintaining its competitive edge and financial performance.
Telefonica Financial Statement Overview
Summary
Telefonica shows operational strength with robust gross profit and EBITDA margins but faces profitability challenges with negative net income. High leverage poses a risk, suggesting a need for better capital management. Cash flow concerns highlight potential liquidity issues, necessitating strategic adjustments.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.60
Neutral
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.55
Neutral
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.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 41.31B | 40.65B | 39.99B | 39.28B | 43.08B | Gross Profit |
| 28.76B | 20.23B | 27.05B | 27.02B | 30.06B | EBIT |
| 2.40B | 2.59B | 4.06B | 13.59B | 6.01B | EBITDA |
| 12.35B | 10.34B | 13.54B | 22.53B | 13.82B | Net Income Common Stockholders |
| -49.00M | -892.00M | 2.01B | 8.14B | 1.58B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.26B | 7.67B | 9.69B | 12.41B | 8.10B | Total Assets |
| 100.50B | 104.32B | 109.64B | 109.21B | 105.05B | Total Debt |
| 45.02B | 44.12B | 8.68B | 8.07B | 5.29B | Net Debt |
| 36.96B | 36.96B | 1.43B | -510.00M | -310.00M | Total Liabilities |
| 77.75B | 77.23B | 77.93B | 80.53B | 86.79B | Stockholders Equity |
| 19.35B | 21.85B | 25.09B | 22.21B | 11.23B |
| Cash Flow | Free Cash Flow | |||
| 5.20B | 5.49B | 5.30B | 4.10B | 6.18B | Operating Cash Flow |
| 0.00 | 11.65B | 10.81B | 10.27B | 13.20B | Investing Cash Flow |
| -5.22B | -4.29B | -5.33B | 5.90B | -7.79B | Financing Cash Flow |
| -4.67B | -7.19B | -7.92B | -12.99B | -5.44B |
Telefonica Technical Analysis
Positive
4.56
Price Trends
4.31
Positive
4.28
Positive
4.35
Positive
Market Momentum
0.08
Positive
57.72
Neutral
20.28
Neutral
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 4.56 is above the 20-day moving average (MA) of 4.56, above the 50-day MA of 4.31, and above the 200-day MA of 4.35, indicating a bullish trend. The MACD of 0.08 indicates Positive momentum. The RSI at 57.72 is Neutral, neither overbought nor oversold. The STOCH value of 20.28 is Neutral, 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $196.04B | 18.07 | 10.54% | 4.12% | -0.08% | -24.48% | |
76 Outperform | $295.67B | 26.79 | 17.93% | 1.18% | 3.62% | 38.24% | |
73 Outperform | $185.18B | 10.61 | 18.27% | 6.16% | 0.61% | 50.39% | |
65 Neutral | $5.84B | ― | -0.85% | ― | -3.48% | -169.60% | |
64 Neutral | $26.08B | ― | <0.01% | 5.25% | 1.18% | ― | |
59 Neutral | $29.98B | 0.95 | -18.77% | 4.02% | 2.12% | -47.15% | |
47 Neutral | $4.46B | ― | -12.49% | ― | -9.95% | 99.47% |
* Communication Services Sector Average
Performance Comparison
TEF
Telefonica
4.58
0.41
9.83%
T
AT&T
27.65
11.06
66.67%
LUMN
Lumen Technologies
4.17
2.59
163.92%
USM
United States Cellular
69.24
33.25
92.39%
VZ
Verizon
43.49
4.58
11.77%
TMUS
T Mobile US
258.75
98.99
61.96%
Telefonica Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 2.70% | Next Earnings Date: May 14, 2025
Earnings Call Sentiment Positive
Telefonica's earnings call showcased strong performance in free cash flow growth and network expansion, with significant achievements in portfolio optimization and core market revenue growth. However, challenges persist in competitive markets like Germany and financial pressures in the Hispam region. Overall, the positive aspects outweigh the negatives.Highlights
Strong Free Cash Flow Growth
Telefonica generated €2.6 billion in free cash flow for 2024, representing a 14% growth year-on-year, surpassing their guidance of more than 10% growth.
Network Expansion and Efficiency
Telefonica passed an additional 10 million premises with fiber and extended its 5G coverage by 10 percentage points. The company maintained a CapEx to revenue ratio of 12.9%, showcasing capital efficiency.
Revenue Growth in Core Markets
Revenue was up 5.4% in Q4, with service revenue maintaining its trajectory. The B2B segment continued to be a growth driver, and Spain saw revenue growth of 1.3% in Q4.
Operational and Strategic Milestones
Successful decommissioning of legacy networks in Spain and portfolio optimization in Hispam, including the sale of operations in Argentina for close to €1.2 billion.
Lowlights
Challenges in Competitive Markets
Competitive dynamics in Germany have become more intense, with other players offering unlimited plans at low prices, affecting Telefonica's market strategy.
Financial Pressure in Hispam
Telefonica del Peru filed for ordinary insolvency procedure, reflecting ongoing financial challenges in the Hispam region.
Company Guidance
During the Telefonica conference call discussing the financial results for the fiscal year 2024, the company provided guidance for the upcoming year. Telefonica expects organic growth in revenue, EBITDA, and EBITDAaL minus CapEx for 2025, with CapEx intensity projected to decline to less than 12.5% over sales by year-end. Additionally, the company anticipates free cash flow generation similar to the €2.6 billion achieved in 2024, which marked a 14% year-on-year increase. Telefonica emphasized its commitment to maintaining efficient capital allocation, continuing deleveraging, and paying a dividend of €0.3 per share in cash. The company also highlighted its strategic review initiative, which aims to explore opportunities for accelerating execution and boosting strategic plans in Europe, with a focus on core markets and activities through portfolio optimization.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.