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Telefonica Brasil (VIV)
NYSE:VIV
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Telefonica Brasil
(NYSE:VIV)77Outperform
Positive Factors
Capital Management
Vivo announced a new buyback program of up to R$1.8bn in shares, indicating confidence in the company's value.
Corporate Performance
Vivo reported positive 3Q results across the board, meeting above-consensus numbers with better underlining trends.
Negative Factors
Revenue Challenges
Vivo reported soft results due to a deceleration in mobile and pressured margins.
Telefonica Brasil (VIV) vs. S&P 500 (SPY)
Market Cap
$13.69B
Dividend Yield2.8%
Average Volume (3M)838.03K
Price to Earnings (P/E)13.4
Beta (1Y)0.50
Revenue Growth-0.47%
EPS Growth1.69%
CountryUS
Employees35,039
SectorCommunication Services
Sector Strength85
IndustryTelecommunications
Share Statistics
EPS (TTM)0.62
Shares Outstanding1,630,643,700
10 Day Avg. Volume996,827
30 Day Avg. Volume838,030
Financial Highlights & Ratios
PEG Ratio7.93
Price to Book (P/B)N/A
Price to Sales (P/S)1.49
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
$9.07Price Target Upside7.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Telefonica Brasil Business Overview & Revenue Model
Company DescriptionTelefonica Brasil S.A. (VIV), operating under the brand name Vivo, is a leading telecommunications company in Brazil. The company offers a wide range of services, including mobile and fixed-line telecommunications, broadband internet, and digital television. Operating in the highly competitive telecommunications sector, Telefonica Brasil is recognized for its extensive network coverage and a broad portfolio of services tailored to both residential and corporate customers.
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
Negative
8.44
Price Trends
8.23
Positive
8.41
Positive
8.55
Negative
Market Momentum
-0.01
Positive
47.89
Neutral
19.87
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VIV, the sentiment is Negative. The current price of 8.44 is below the 20-day moving average (MA) of 8.69, above the 50-day MA of 8.23, and below the 200-day MA of 8.55, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 47.89 is Neutral, neither overbought nor oversold. The STOCH value of 19.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $13.69B | 13.38 | 7.95% | 2.80% | -0.47% | 1.69% | |
76 Outperform | $187.92B | 17.55 | 10.54% | 4.24% | -0.08% | -24.48% | |
76 Outperform | $299.98B | 27.19 | 17.93% | 1.16% | 3.62% | 38.24% | |
73 Outperform | $180.34B | 10.33 | 18.27% | 6.27% | 0.61% | 50.39% | |
70 Outperform | $44.10B | 28.13 | 7.78% | 3.58% | 3.38% | -45.25% | |
61 Neutral | $6.46B | ― | -17.99% | ― | 34.38% | 24.90% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
VIV
Telefonica Brasil
8.44
-1.41
-14.31%
AMX
America Movil
14.76
-3.78
-20.39%
T
AT&T
26.73
10.47
64.39%
VZ
Verizon
44.23
7.22
19.51%
TMUS
T Mobile US
262.95
101.24
62.61%
S
SentinelOne
19.90
-7.55
-27.50%
Telefonica Brasil Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -6.33% | 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.