# Telefonica (TEF.MC)

Canonical: https://gigainvestors.com/s/TEF.MC

Analysis as of: 2026-10-16T07:34:42.682Z. Financial observations: FY1996–FY2025.

Listing currency: EUR. Reporting currency: EUR.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: EUR 3.32 per share; close as of 2026-10-15.

Estimated value: low EUR 2.74 per share, central EUR 3.03 per share, high EUR 3.42 per share. Buy at or below the central value EUR 3.03 per share. Valuation as of 2026-10-16T07:34:42.682Z; scenarios are not confidence intervals.

Expected annual return: 9.2% at the stated quote. About 9.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; ES 10-year bond 4.0% + 4 points).

## Checklist

### understandable: fail

- 6 revenue declines in the last 10 years

- more than 5 revenue declines in ten years

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 6

- Years with a net loss: 3

- Operating margin variation: 0.71×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.11×

- FY2017: 0.13×

- FY2018: 0.13×

- FY2019: 0.06×

- FY2020: 0.14×

- FY2021: 0.35×

- FY2022: 0.10×

- FY2023: 0.06×

- FY2024: 0.06×

- FY2025: 0.04×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 62.3pp below the typical margin (limit 4pp)

- ROIC, median of available years: 8.8%

- ROIC, second-lowest year: 4.0%

- Typical minus recent gross margin: 62.3 pp

- Typical gross margin (annual median): 69.7%

- Recent gross margin (lower of latest and 3-year median): 7.4%

- Years with nonpositive capital: 1

- Capital spending / revenue: 16.0%

- ROIC including acquisitions, ten-year median: 5.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 9.4%

- FY2017: 14.1%

- FY2018: 11.9%

- FY2019: 7.3%

- FY2020: 15.4%

- FY2021: 34.6%

- FY2022: 8.2%

- FY2023: 6.3%

- FY2024: 4.0%

- FY2025: 3.8%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 2.01×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: EUR 9.8B

- Net income, five-year total: EUR 4.9B

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -0.5 pp

- Working capital / revenue, change between three-year averages: -2.9 pp

- Working capital / revenue, final three-year average: -1.6%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.08×

- FY2022: 1.67×

- FY2023: 0.05×

- FY2024: -26.52×

- FY2025: 0.82×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 11.9% vs 4.0%

- Per-share earnings: 0.55 to -0.16 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.3%

- Ordinary dilution, 5-year annual growth: 0.7%

- Market cap gain: EUR -25B

- Cumulative retained earnings: EUR -716M

- Diluted shares, 10-year annual growth: 1.3%

- Diluted shares, 5-year annual growth: 0.7%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: EUR -0.71

- Per-share value, starting three-year median: EUR 0.55

- Per-share value, ending three-year median: EUR -0.16

- Buybacks concentrated in cheaper years (correlation): 0.21

- Average buyback yield: 2.3%

- Buyback history: 8 years

- Debt-funded buybacks: No

- Acquisition spending: EUR 11B

- Cumulative net income, 10 years: EUR 17B

- ROIC, first three-year median: 11.9%

- ROIC, last three-year median: 4.0%

Chart: Earnings per share; fiscal year observations.

- FY2016: EUR 0.47

- FY2017: EUR 0.61

- FY2018: EUR 0.65

- FY2019: EUR 0.33

- FY2020: EUR 0.29

- FY2021: EUR 1.44

- FY2022: EUR 0.35

- FY2023: EUR -0.16

- FY2024: EUR -0.01

- FY2025: EUR -0.77

### accounting: pass

- Sloan accruals: -15.3%

- Receivables to sales index (DSRI): 1.09×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.75×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -8.9%

- FY2017: -9.3%

- FY2018: -8.7%

- FY2019: -11.2%

- FY2020: -11.1%

- FY2021: -2.0%

- FY2022: -8.0%

- FY2023: -12.0%

- FY2024: -11.0%

- FY2025: -15.3%

## Holders

## Price story

Down 34% since May 2022 · "Telefonica Shares Tumble After Plan to Halve 2026 Dividend" (finance.yahoo.com, Nov 2025) · sales -15%

Story as of 2026-10-16T10:00:02.121Z; price observation 2026-10-15.

Price needs cash profits to grow 2.3% a year for ten years

- 2025-05-14: Telefonica posts $1.45 billion loss after write-downs on Peru, Argentina sales ([finance.yahoo.com](https://finance.yahoo.com/news/telefonica-books-1-45-billion-054849330.html))

- 2025-07-30: Telefonica books $59 million net loss in second quarter on currency swings ([finance.yahoo.com](https://finance.yahoo.com/news/telefonica-books-59-million-net-060241658.html))

- 2025-11-04: Telefonica Shares Tumble After Plan to Halve 2026 Dividend ([finance.yahoo.com](https://finance.yahoo.com/m/c4ff4c4a-7b36-33cd-acb5-c64f468b497b/telefonica-shares-tumble.html))

- 2026-02-24: Telefonica Net Loss Widens on Restructuring Costs ([finance.yahoo.com](https://finance.yahoo.com/m/9aff9053-0d6c-3e3c-9de6-531922fd0800/telefonica-net-loss-widens-on.html))

### Sales · FY2024–2025

sales -15%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: EUR 52B 

- FY2017: EUR 52B 

- FY2018: EUR 49B 

- FY2019: EUR 48B 

- FY2020: EUR 43B 

- FY2021: EUR 39B 

- FY2022: EUR 40B 

- FY2023: EUR 41B 

- FY2024: EUR 41B 

- FY2025: EUR 35B 

### Gross margin · FY2025

gross margin 7.4%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 70.7% 

- FY2017: 71.1% 

- FY2018: 71.2% 

- FY2019: 71.8% 

- FY2020: 69.8% 

- FY2021: 68.8% 

- FY2022: 67.6% 

- FY2023: 49.8% 

- FY2024: 69.6% 

- FY2025: 7.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in telecom services; annual sales are EUR 35.1 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2025: revenue 35120000000; grossProfit 2599000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TEF.MC: Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Spain, Brazil, Germany, and the United Kingdom. The company offers digital services for residential customers, such as entertainment, home connectivity and security; and advanced solutions for businesses and public administrations, including cloud, cybersecurity, IoT, artificial intelligence, and professional services. It also provides wholesale services to other operators; fixed and wireless telephony services. It is also involved in the wholesale commercialization of a fiber-to-the-home network; and manages borrowing activities. In addition, the company offers ecosystem services, such as devices, health, insurance, video content, solar energy, alarm systems, advertising, financial services and education, etc.; traffic, connection fees, regular network usage fees, interconnection, network and equipment leasing, and handset sales; and other digital services comprising Pay TV and value-added services. Telefónica, S.A. was incorporated in 1924 and is based in Madrid, Spain.

### Why customers stay

Margins ranged from 7.4% to 69.6% during 2023–25; it earns 8.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2023: grossProfit / revenue = 49.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2024: grossProfit / revenue = 69.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2025: grossProfit / revenue = 7.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); 10-year return on capital observations [[2016,0.09371803966390703],[2017,0.14125769445784378],[2018,0.1185714482968118],[2019,0.07323981268485048],[2020,0.154250235563995],[2021,0.34596299337528924],[2022,0.082237493704885],[2023,0.06346531585959042],[2024,0.040283348427998446],[2025,0.03782503829731756]]; median 0.08797776668439602. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back EUR 362 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2016: growth capex 0; upkeep 9187000000; owner earnings 2831000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2017: growth capex 0; upkeep 8992000000; owner earnings 3536000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2018: growth capex 0; upkeep 8777000000; owner earnings 3603000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2019: growth capex 0; upkeep 8410000000; owner earnings 2390800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2020: growth capex 0; upkeep 7020000000; owner earnings 2862200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2021: growth capex 0; upkeep 6164000000; owner earnings 8756000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2022: growth capex 0; upkeep 5508000000; owner earnings 3357390081.931867. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2024: growth capex 0; upkeep 5790000000; owner earnings 1299400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); Dividend observations: [[2016,2906000000],[2017,2459000000],[2018,2794000000],[2019,2742000000],[2020,1296000000],[2021,3630000000],[2022,1397000000],[2023,1701000000],[2024,1757000000],[2025,1857000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); FY2025: cash repurchases 362000000 EUR.

### Are managers owners

Insiders own 22% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TEF.MC SharesStats.PercentInsiders = 21.994 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 2.3% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:34:42.682Z); Ten-year compound average after fade. Initial solved rate 0.020039561995596623. Price 3.32; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.3741455568958585 → FY2025 -0.6258476832948695. Closing-price date 2026-10-15.

## Monthly share-price history (EUR per share)

- 2016-10: EUR 9.26 per share

- 2016-11: EUR 7.85 per share

- 2016-12: EUR 8.82 per share

- 2017-01: EUR 8.93 per share

- 2017-02: EUR 9.65 per share

- 2017-03: EUR 10.49 per share

- 2017-04: EUR 10.16 per share

- 2017-05: EUR 9.91 per share

- 2017-06: EUR 9.04 per share

- 2017-07: EUR 9.56 per share

- 2017-08: EUR 9.06 per share

- 2017-09: EUR 9.19 per share

- 2017-10: EUR 9.01 per share

- 2017-11: EUR 8.61 per share

- 2017-12: EUR 8.13 per share

- 2018-01: EUR 8.25 per share

- 2018-02: EUR 7.99 per share

- 2018-03: EUR 8.03 per share

- 2018-04: EUR 8.43 per share

- 2018-05: EUR 7.55 per share

- 2018-06: EUR 7.28 per share

- 2018-07: EUR 7.69 per share

- 2018-08: EUR 6.99 per share

- 2018-09: EUR 6.82 per share

- 2018-10: EUR 7.24 per share

- 2018-11: EUR 7.93 per share

- 2018-12: EUR 7.34 per share

- 2019-01: EUR 7.50 per share

- 2019-02: EUR 7.59 per share

- 2019-03: EUR 7.47 per share

- 2019-04: EUR 7.43 per share

- 2019-05: EUR 7.18 per share

- 2019-06: EUR 7.22 per share

- 2019-07: EUR 6.92 per share

- 2019-08: EUR 6.30 per share

- 2019-09: EUR 7.00 per share

- 2019-10: EUR 6.88 per share

- 2019-11: EUR 6.95 per share

- 2019-12: EUR 6.23 per share

- 2020-01: EUR 6.11 per share

- 2020-02: EUR 5.36 per share

- 2020-03: EUR 4.17 per share

- 2020-04: EUR 4.18 per share

- 2020-05: EUR 4.24 per share

- 2020-06: EUR 4.25 per share

- 2020-07: EUR 3.55 per share

- 2020-08: EUR 3.31 per share

- 2020-09: EUR 2.94 per share

- 2020-10: EUR 2.81 per share

- 2020-11: EUR 3.66 per share

- 2020-12: EUR 3.25 per share

- 2021-01: EUR 3.55 per share

- 2021-02: EUR 3.53 per share

- 2021-03: EUR 3.82 per share

- 2021-04: EUR 3.85 per share

- 2021-05: EUR 4.02 per share

- 2021-06: EUR 3.94 per share

- 2021-07: EUR 3.87 per share

- 2021-08: EUR 4.18 per share

- 2021-09: EUR 4.05 per share

- 2021-10: EUR 3.76 per share

- 2021-11: EUR 4.00 per share

- 2021-12: EUR 3.85 per share

- 2022-01: EUR 4.13 per share

- 2022-02: EUR 4.28 per share

- 2022-03: EUR 4.39 per share

- 2022-04: EUR 4.63 per share

- 2022-05: EUR 5.06 per share

- 2022-06: EUR 4.86 per share

- 2022-07: EUR 4.36 per share

- 2022-08: EUR 4.12 per share

- 2022-09: EUR 3.38 per share

- 2022-10: EUR 3.49 per share

- 2022-11: EUR 3.59 per share

- 2022-12: EUR 3.39 per share

- 2023-01: EUR 3.49 per share

- 2023-02: EUR 3.85 per share

- 2023-03: EUR 3.97 per share

- 2023-04: EUR 4.13 per share

- 2023-05: EUR 3.97 per share

- 2023-06: EUR 3.72 per share

- 2023-07: EUR 3.88 per share

- 2023-08: EUR 3.82 per share

- 2023-09: EUR 3.87 per share

- 2023-10: EUR 3.65 per share

- 2023-11: EUR 3.95 per share

- 2023-12: EUR 3.53 per share

- 2024-01: EUR 3.77 per share

- 2024-02: EUR 3.79 per share

- 2024-03: EUR 4.09 per share

- 2024-04: EUR 4.21 per share

- 2024-05: EUR 4.29 per share

- 2024-06: EUR 3.96 per share

- 2024-07: EUR 4.18 per share

- 2024-08: EUR 4.09 per share

- 2024-09: EUR 4.40 per share

- 2024-10: EUR 4.31 per share

- 2024-11: EUR 4.29 per share

- 2024-12: EUR 3.94 per share

- 2025-01: EUR 3.94 per share

- 2025-02: EUR 4.30 per share

- 2025-03: EUR 4.35 per share

- 2025-04: EUR 4.52 per share

- 2025-05: EUR 4.71 per share

- 2025-06: EUR 4.46 per share

- 2025-07: EUR 4.52 per share

- 2025-08: EUR 4.58 per share

- 2025-09: EUR 4.40 per share

- 2025-10: EUR 4.39 per share

- 2025-11: EUR 3.74 per share

- 2025-12: EUR 3.49 per share

- 2026-01: EUR 3.42 per share

- 2026-02: EUR 3.85 per share

- 2026-03: EUR 3.80 per share

- 2026-04: EUR 3.86 per share

- 2026-05: EUR 3.94 per share

- 2026-06: EUR 3.52 per share

- 2026-07: EUR 3.58 per share

- 2026-08: EUR 3.65 per share

- 2026-09: EUR 3.34 per share

- 2026-10: EUR 3.25 per share

## Annual estimated value (EUR per share)

- FY2016: low EUR 7.24 per share, central EUR 8.09 per share, high EUR 9.21 per share

- FY2017: low EUR 7.26 per share, central EUR 8.10 per share, high EUR 9.20 per share

- FY2018: low EUR 7.00 per share, central EUR 7.78 per share, high EUR 8.81 per share

- FY2019: low EUR 7.23 per share, central EUR 8.01 per share, high EUR 9.04 per share

- FY2020: low EUR 7.09 per share, central EUR 7.88 per share, high EUR 8.94 per share

- FY2021: low EUR 7.20 per share, central EUR 7.91 per share, high EUR 8.86 per share

- FY2022: low EUR 7.03 per share, central EUR 7.81 per share, high EUR 8.85 per share

- FY2023: low EUR 6.11 per share, central EUR 6.83 per share, high EUR 7.79 per share

- FY2024: low EUR 6.60 per share, central EUR 7.33 per share, high EUR 8.31 per share

- FY2025: low EUR 3.10 per share, central EUR 3.40 per share, high EUR 3.79 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.