TELEFONICA SA (1TEF.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1TEF - ES0178430E18 - Common Stock
3.484 EUR
+0.06 (+1.87%)
Taking everything into account, 1TEF scores 3 out of 10 in our fundamental rating. 1TEF was compared to 36 industry peers in the Diversified Telecommunication Services industry. While 1TEF is still in line with the averages on profitability rating, there are concerns on its financial health. 1TEF is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- 1TEF had positive earnings in the past year.
- In the past year 1TEF had a positive cash flow from operations.
- In multiple years 1TEF reported negative net income over the last 5 years.
- 1TEF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of 1TEF (-4.10%) is worse than 83.78% of its industry peers.
- With a Return On Equity value of -21.56%, 1TEF is not doing good in the industry: 83.78% of the companies in the same industry are doing better.
- 1TEF's Return On Invested Capital of 7.34% is fine compared to the rest of the industry. 1TEF outperforms 64.86% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for 1TEF is below the industry average of 7.93%.
- The last Return On Invested Capital (7.34%) for 1TEF is above the 3 year average (3.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.1% | ||
| ROE | -21.56% | ||
| ROIC | 7.34% |
ROA(3y)0.08%
ROA(5y)1.74%
ROE(3y)0.1%
ROE(5y)9.53%
ROIC(3y)3.26%
ROIC(5y)3.34%
1.3 Margins
- 1TEF has a Operating Margin (12.00%) which is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of 1TEF has grown nicely.
- The Gross Margin of 1TEF (35.73%) is worse than 70.27% of its industry peers.
- 1TEF's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12% | ||
| PM (TTM) | N/A | ||
| GM | 35.73% |
OM growth 3Y18.75%
OM growth 5Y8.06%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.37%
GM growth 5Y-1.04%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), 1TEF is creating value.
- 1TEF has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for 1TEF has been reduced compared to 5 years ago.
- Compared to 1 year ago, 1TEF has a worse debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of 1TEF is 8.80, which is on the high side as it means it would take 1TEF, 8.80 years of fcf income to pay off all of its debts.
- 1TEF has a Debt to FCF ratio of 8.80. This is comparable to the rest of the industry: 1TEF outperforms 54.05% of its industry peers.
- A Debt/Equity ratio of 2.07 is on the high side and indicates that 1TEF has dependencies on debt financing.
- The Debt to Equity ratio of 1TEF (2.07) is worse than 86.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.07 | ||
| Debt/FCF | 8.8 | ||
| Altman-Z | N/A |
ROIC/WACC1.87
WACC3.92%
2.3 Liquidity
- 1TEF has a Current Ratio of 0.84. This is a bad value and indicates that 1TEF is not financially healthy enough and could expect problems in meeting its short term obligations.
- 1TEF has a better Current ratio (0.84) than 62.16% of its industry peers.
- 1TEF has a Quick Ratio of 0.84. This is a bad value and indicates that 1TEF is not financially healthy enough and could expect problems in meeting its short term obligations.
- 1TEF's Quick ratio of 0.80 is in line compared to the rest of the industry. 1TEF outperforms 59.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- 1TEF shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -34.78%.
- 1TEF shows a strong growth in Revenue. In the last year, the Revenue has grown by 40.77%.
- 1TEF shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.12% yearly.
EPS 1Y (TTM)-34.78%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-18.18%
Revenue 1Y (TTM)40.77%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%-10.63%
3.2 Future
- Based on estimates for the next years, 1TEF will show a small growth in Earnings Per Share. The EPS will grow by 1.32% on average per year.
- Based on estimates for the next years, 1TEF will show a decrease in Revenue. The Revenue will decrease by -1.34% on average per year.
EPS Next Y-37.95%
EPS Next 2Y-9.33%
EPS Next 3Y-2.22%
EPS Next 5Y1.32%
Revenue Next Year-11.05%
Revenue Next 2Y-5.32%
Revenue Next 3Y-3.08%
Revenue Next 5Y-1.34%
3.3 Evolution
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- 1TEF is valuated reasonably with a Price/Earnings ratio of 11.61.
- Based on the Price/Earnings ratio, 1TEF is valued a bit cheaper than 75.68% of the companies in the same industry.
- 1TEF is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 10.59, which indicates a very decent valuation of 1TEF.
- 1TEF's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. 1TEF is cheaper than 72.97% of the companies in the same industry.
- 1TEF is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.61 | ||
| Fwd PE | 10.59 |
4.2 Price Multiples
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of 1TEF indicates a rather cheap valuation: 1TEF is cheaper than 97.30% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.03 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- 1TEF's earnings are expected to decrease with -2.22% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-9.33%
EPS Next 3Y-2.22%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 7.04%, 1TEF is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 3.36, 1TEF pays a better dividend. On top of this 1TEF pays more dividend than 97.30% of the companies listed in the same industry.
- 1TEF's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.04% |
5.2 History
- The dividend of 1TEF decreases each year by -5.71%.
Dividend Growth(5Y)-5.71%
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
- 1TEF has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-48.26%
EPS Next 2Y-9.33%
EPS Next 3Y-2.22%
TELEFONICA SA / 1TEF.MI FAQ
Can you provide the ChartMill fundamental rating for TELEFONICA SA?
ChartMill assigns a fundamental rating of 4 / 10 to 1TEF.MI.
What is the valuation status of TELEFONICA SA (1TEF.MI) stock?
ChartMill assigns a valuation rating of 5 / 10 to TELEFONICA SA (1TEF.MI). This can be considered as Fairly Valued.
What is the profitability of 1TEF stock?
TELEFONICA SA (1TEF.MI) has a profitability rating of 4 / 10.
Can you provide the PE and PB ratios for 1TEF stock?
The Price/Earnings (PE) ratio for TELEFONICA SA (1TEF.MI) is 11.61 and the Price/Book (PB) ratio is 1.12.
What is the expected EPS growth for TELEFONICA SA (1TEF.MI) stock?
The Earnings per Share (EPS) of TELEFONICA SA (1TEF.MI) is expected to decline by -37.95% in the next year.