TELEFONICA BRASIL-ADR (VIV) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VIV - US87936R2058 - ADR
13.95 USD
+0.34 (+2.5%)
13.95 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to VIV. VIV was compared to 37 industry peers in the Diversified Telecommunication Services industry. VIV has an average financial health and profitability rating. VIV has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year VIV was profitable.
- In the past year VIV had a positive cash flow from operations.
- In the past 5 years VIV has always been profitable.
- VIV 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 4.89%, VIV is in the better half of the industry, outperforming 70.27% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 8.85%, VIV is in the better half of the industry, outperforming 70.27% of the companies in the same industry.
- VIV's Return On Invested Capital of 7.84% is amongst the best of the industry. VIV outperforms 86.49% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for VIV is in line with the industry average of 6.52%.
- The last Return On Invested Capital (7.84%) for VIV is above the 3 year average (6.41%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.89% | ||
| ROE | 8.85% | ||
| ROIC | 7.84% |
ROA(3y)4.01%
ROA(5y)4.36%
ROE(3y)7.05%
ROE(5y)7.39%
ROIC(3y)6.41%
ROIC(5y)5.75%
1.3 Margins
- The Profit Margin of VIV (10.34%) is better than 72.97% of its industry peers.
- In the last couple of years the Profit Margin of VIV has declined.
- VIV's Operating Margin of 15.52% is fine compared to the rest of the industry. VIV outperforms 62.16% of its industry peers.
- In the last couple of years the Operating Margin of VIV has remained more or less at the same level.
- With a Gross Margin value of 44.27%, VIV is not doing good in the industry: 62.16% of the companies in the same industry are doing better.
- In the last couple of years the Gross Margin of VIV has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.52% | ||
| PM (TTM) | 10.34% | ||
| GM | 44.27% |
OM growth 3Y9.5%
OM growth 5Y1.09%
PM growth 3Y-11.16%
PM growth 5Y-2.54%
GM growth 3Y0.11%
GM growth 5Y-2.57%
2. Health
2.1 Basic Checks
- VIV has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for VIV has been reduced compared to 1 year ago.
- The number of shares outstanding for VIV has been increased compared to 5 years ago.
- Compared to 1 year ago, VIV has a worse debt to assets ratio.
2.2 Solvency
- VIV has an Altman-Z score of 2.07. This is not the best score and indicates that VIV is in the grey zone with still only limited risk for bankruptcy at the moment.
- The Altman-Z score of VIV (2.07) is better than 83.78% of its industry peers.
- The Debt to FCF ratio of VIV is 1.74, which is an excellent value as it means it would take VIV, only 1.74 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1.74, VIV belongs to the top of the industry, outperforming 94.59% of the companies in the same industry.
- VIV has a Debt/Equity ratio of 0.19. This is a healthy value indicating a solid balance between debt and equity.
- VIV's Debt to Equity ratio of 0.19 is amongst the best of the industry. VIV outperforms 86.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.19 | ||
| Debt/FCF | 1.74 | ||
| Altman-Z | 2.07 |
ROIC/WACC0.54
WACC14.5%
2.3 Liquidity
- A Current Ratio of 1.02 indicates that VIV should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.02, VIV perfoms like the industry average, outperforming 48.65% of the companies in the same industry.
- VIV has a Quick Ratio of 1.02. This is a bad value and indicates that VIV is not financially healthy enough and could expect problems in meeting its short term obligations.
- VIV has a Quick ratio of 0.96. This is comparable to the rest of the industry: VIV outperforms 45.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 14.68% over the past year.
- The earnings per share for VIV have been decreasing by -10.63% on average. This is quite bad
- Looking at the last year, VIV shows a small growth in Revenue. The Revenue has grown by 6.88% in the last year.
- Measured over the past years, VIV shows a small growth in Revenue. The Revenue has been growing by 4.76% on average per year.
EPS 1Y (TTM)14.68%
EPS 3Y-3.1%
EPS 5Y-10.63%
EPS Q2Q%15.69%
Revenue 1Y (TTM)6.88%
Revenue growth 3Y8.24%
Revenue growth 5Y4.76%
Sales Q2Q%6.48%
3.2 Future
- VIV is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.15% yearly.
- Based on estimates for the next years, VIV will show a small growth in Revenue. The Revenue will grow by 5.74% on average per year.
EPS Next Y16.48%
EPS Next 2Y25.37%
EPS Next 3Y23.63%
EPS Next 5Y16.15%
Revenue Next Year6.87%
Revenue Next 2Y6.4%
Revenue Next 3Y6.2%
Revenue Next 5Y5.74%
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 accelerating.
- 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 19.65, VIV is valued on the expensive side.
- 70.27% of the companies in the same industry are more expensive than VIV, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of VIV to the average of the S&P500 Index (27.21), we can say VIV is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 13.92, VIV is valued correctly.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of VIV indicates a somewhat cheap valuation: VIV is cheaper than 75.68% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. VIV is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.65 | ||
| Fwd PE | 13.92 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VIV indicates a rather cheap valuation: VIV is cheaper than 89.19% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as VIV.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.4 | ||
| EV/EBITDA | 5.31 |
4.3 Compensation for Growth
- VIV's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- VIV has a very decent profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as VIV's earnings are expected to grow with 23.63% in the coming years.
PEG (NY)1.19
PEG (5Y)N/A
EPS Next 2Y25.37%
EPS Next 3Y23.63%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.86%, VIV has a reasonable but not impressive dividend return.
- VIV's Dividend Yield is a higher than the industry average which is at 2.33.
- Compared to an average S&P500 Dividend Yield of 1.82, VIV has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
5.2 History
- The dividend of VIV decreases each year by -26.73%.
- VIV has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-26.73%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 42.62% of the earnings are spent on dividend by VIV. This is a bit on the high side, but may be sustainable.
DP42.62%
EPS Next 2Y25.37%
EPS Next 3Y23.63%
TELEFONICA BRASIL-ADR / VIV FAQ
Can you provide the ChartMill fundamental rating for TELEFONICA BRASIL-ADR?
ChartMill assigns a fundamental rating of 6 / 10 to VIV.
What is the valuation status for VIV stock?
ChartMill assigns a valuation rating of 5 / 10 to TELEFONICA BRASIL-ADR (VIV). This can be considered as Fairly Valued.
How profitable is TELEFONICA BRASIL-ADR (VIV) stock?
TELEFONICA BRASIL-ADR (VIV) has a profitability rating of 6 / 10.
What is the valuation of TELEFONICA BRASIL-ADR based on its PE and PB ratios?
The Price/Earnings (PE) ratio for TELEFONICA BRASIL-ADR (VIV) is 19.65 and the Price/Book (PB) ratio is 1.74.
What is the earnings growth outlook for TELEFONICA BRASIL-ADR?
The Earnings per Share (EPS) of TELEFONICA BRASIL-ADR (VIV) is expected to grow by 16.48% in the next year.