TELEFONICA SA (TNE5.DE) Stock Fundamental Analysis
FRA:TNE5 - Deutsche Boerse Ag - ES0178430E18 - Common Stock - Currency: EUR
TNE5 gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 29 industry peers in the Diversified Telecommunication Services industry. TNE5 has a bad profitability rating. Also its financial health evaluation is rather negative. TNE5 is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TNE5 was profitable.
In the past year TNE5 had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: TNE5 reported negative net income in multiple years.
TNE5 had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -0.32%, TNE5 is doing worse than 70.00% of the companies in the same industry.
With a Return On Equity value of -1.64%, TNE5 is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
TNE5 has a worse Return On Invested Capital (2.27%) than 80.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TNE5 is below the industry average of 7.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.32% | ||
| ROE | -1.64% | ||
| ROIC | 2.27% |
ROA(3y)0.08%
ROA(5y)1.74%
ROE(3y)0.1%
ROE(5y)9.53%
ROIC(3y)3.06%
ROIC(5y)3.14%
1.3 Margins
With a Operating Margin value of 5.82%, TNE5 is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
TNE5's Operating Margin has improved in the last couple of years.
TNE5's Gross Margin of 49.39% is on the low side compared to the rest of the industry. TNE5 is outperformed by 63.33% of its industry peers.
TNE5's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.82% | ||
| PM (TTM) | N/A | ||
| GM | 49.39% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TNE5 is destroying value.
The number of shares outstanding for TNE5 remains at a similar level compared to 1 year ago.
Compared to 5 years ago, TNE5 has less shares outstanding
The debt/assets ratio for TNE5 is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.96, we must say that TNE5 is in the distress zone and has some risk of bankruptcy.
TNE5's Altman-Z score of 0.96 is on the low side compared to the rest of the industry. TNE5 is outperformed by 66.67% of its industry peers.
TNE5 has a debt to FCF ratio of 9.58. This is a negative value and a sign of low solvency as TNE5 would need 9.58 years to pay back of all of its debts.
TNE5 has a Debt to FCF ratio (9.58) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.03 is on the high side and indicates that TNE5 has dependencies on debt financing.
The Debt to Equity ratio of TNE5 (2.03) is worse than 80.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 9.58 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.59
WACC3.81%
2.3 Liquidity
A Current Ratio of 0.87 indicates that TNE5 may have some problems paying its short term obligations.
With a decent Current ratio value of 0.87, TNE5 is doing good in the industry, outperforming 70.00% of the companies in the same industry.
A Quick Ratio of 0.83 indicates that TNE5 may have some problems paying its short term obligations.
TNE5's Quick ratio of 0.83 is fine compared to the rest of the industry. TNE5 outperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.45% over the past year.
TNE5 shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.97% yearly.
Looking at the last year, TNE5 shows a small growth in Revenue. The Revenue has grown by 1.63% in the last year.
Measured over the past years, TNE5 shows a decrease in Revenue. The Revenue has been decreasing by -3.12% on average per year.
EPS 1Y (TTM)10.45%
EPS 3YN/A
EPS 5Y-8.97%
EPS Q2Q%-51.98%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%7.98%
3.2 Future
TNE5 is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -13.15% yearly.
TNE5 is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.11% yearly.
EPS Next Y-23.1%
EPS Next 2Y-10.61%
EPS Next 3Y-13.15%
EPS Next 5YN/A
Revenue Next Year-0.4%
Revenue Next 2Y0.25%
Revenue Next 3Y0.55%
Revenue Next 5Y1.11%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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
With a Price/Earnings ratio of 10.52, the valuation of TNE5 can be described as very reasonable.
Based on the Price/Earnings ratio, TNE5 is valued a bit cheaper than the industry average as 76.67% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 29.35, TNE5 is valued rather cheaply.
With a Price/Forward Earnings ratio of 13.76, TNE5 is valued correctly.
TNE5's Price/Forward Earnings is on the same level as the industry average.
TNE5's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.10.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 13.76 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, TNE5 is valued cheaply inside the industry as 96.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.83 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A cheap valuation may be justified as TNE5's earnings are expected to decrease with -13.15% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-10.61%
EPS Next 3Y-13.15%
5. Dividend
5.1 Amount
TNE5 has a Yearly Dividend Yield of 5.86%, which is a nice return.
TNE5's Dividend Yield is a higher than the industry average which is at 5.01.
TNE5's Dividend Yield is rather good when compared to the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.86% |
5.2 History
The dividend of TNE5 decreases each year by -5.71%.
Dividend Growth(5Y)-5.71%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
The earnings of TNE5 are negative and hence is the payout ratio. TNE5 will probably not be able to sustain this dividend level.
The Dividend Rate of TNE5 has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP-593.4%
EPS Next 2Y-10.61%
EPS Next 3Y-13.15%
FRA:TNE5 (3/7/2025, 7:00:00 PM)
4.206
+0.06 (+1.5%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners28.66%
Inst Owner ChangeN/A
Ins Owners0.4%
Ins Owner ChangeN/A
Market Cap23.74B
Analysts62.96
Price Target4.29 (2%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.86% |
Yearly Dividend0.33
Dividend Growth(5Y)-5.71%
DP-593.4%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-17.2%
Min EPS beat(2)-53.43%
Max EPS beat(2)19.03%
EPS beat(4)3
Avg EPS beat(4)5.8%
Min EPS beat(4)-53.43%
Max EPS beat(4)36.57%
EPS beat(8)6
Avg EPS beat(8)3.7%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)0.7%
Min Revenue beat(2)-1.43%
Max Revenue beat(2)2.83%
Revenue beat(4)3
Avg Revenue beat(4)3.17%
Min Revenue beat(4)-1.43%
Max Revenue beat(4)10.07%
Revenue beat(8)4
Avg Revenue beat(8)1.59%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-0.2%
PT rev (3m)-0.93%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-2%
EPS NY rev (3m)-5.8%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.52 | ||
| Fwd PE | 13.76 | ||
| P/S | 0.57 | ||
| P/FCF | 4.83 | ||
| P/OCF | 2.27 | ||
| P/B | 1.23 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)0.4
EY9.51%
EPS(NY)0.31
Fwd EY7.27%
FCF(TTM)0.87
FCFY20.71%
OCF(TTM)1.85
OCFY43.97%
SpS7.32
BVpS3.43
TBVpS-1.24
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.32% | ||
| ROE | -1.64% | ||
| ROCE | 3.22% | ||
| ROIC | 2.27% | ||
| ROICexc | 2.56% | ||
| ROICexgc | 4.24% | ||
| OM | 5.82% | ||
| PM (TTM) | N/A | ||
| GM | 49.39% | ||
| FCFM | 11.9% |
ROA(3y)0.08%
ROA(5y)1.74%
ROE(3y)0.1%
ROE(5y)9.53%
ROIC(3y)3.06%
ROIC(5y)3.14%
ROICexc(3y)3.42%
ROICexc(5y)3.52%
ROICexgc(3y)5.7%
ROICexgc(5y)5.87%
ROCE(3y)4.35%
ROCE(5y)4.46%
ROICexcg growth 3Y26.02%
ROICexcg growth 5Y3.81%
ROICexc growth 3Y25.08%
ROICexc growth 5Y8.63%
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%
F-Score6
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 9.58 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 13.36% | ||
| Interest Coverage | -2.27 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 0.96 |
F-Score6
WACC3.81%
ROIC/WACC0.59
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)13.84%
Cap/Sales(5y)14.7%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.45%
EPS 3YN/A
EPS 5Y-8.97%
EPS Q2Q%-51.98%
EPS Next Y-23.1%
EPS Next 2Y-10.61%
EPS Next 3Y-13.15%
EPS Next 5YN/A
Revenue 1Y (TTM)1.63%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%7.98%
Revenue Next Year-0.4%
Revenue Next 2Y0.25%
Revenue Next 3Y0.55%
Revenue Next 5Y1.11%
EBIT growth 1Y-42.5%
EBIT growth 3Y20.77%
EBIT growth 5Y4.69%
EBIT Next Year198.13%
EBIT Next 3Y45.24%
EBIT Next 5Y26.15%
FCF growth 1Y8.31%
FCF growth 3Y6.37%
FCF growth 5Y-7.72%
OCF growth 1Y0.45%
OCF growth 3Y0.61%
OCF growth 5Y-7%