MeritValue

TELEFONICA S A

TEFOFdata completeness 75%10 fiscal years on file

Data notes: no data for concept 'capex'; no data for concept 'interestExpense'

The thesis, from the filings

TELEFONICA S A earns about 7% on invested capital, but has diluted owners by 3% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near €2.89 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2020FY 2021FY 2022FY 2023FY 2024
Revenue€43.1B1€39.3B2€40B3€40.7B3€41.3B3
Net income€1.58B4€8.14B5€2.01B6−€892M6−€49M6
Operating cash flow€13.2B7€10.3B8€11.8B9€11.6B9€11B9
Capital expenditure—————
Free cash flow (derived)—————
Total debt€38.9B10€30.3B11———
Cash & equivalents€5.6B12€8.58B13€7.25B13€7.15B13€8.06B13
Diluted shares5.53B5.78B5.78B5.75B5.67B

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
€34.12
your share of equity
Profit it earned you last year
−€0.09
Free cash flow it threw off
—
Debt you’d be carrying
—

10 shares is a claim on €34.12 of net worth that earned you −€0.09 last year.

iii. Is this a good business?
Moat signal · return on invested capital
7% avg · 5y
FY20 4%FY21 24%FY22 13%FY23 -8%FY24 2%

It earned an average 7% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+3% shares · 5y

Share count is up 3% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 22% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
€2.89
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings€1.58B
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 20-F · period ending 2020-12-31 · accession 0000814052-23-000035 (Revenue)
  2. 20-F · period ending 2021-12-31 · accession 0000814052-24-000034 (Revenue)
  3. 20-F · period ending 2022-12-31 · accession 0000814052-25-000036 (Revenue)
  4. 20-F · period ending 2020-12-31 · accession 0000814052-23-000035 (ProfitLossAttributableToOwnersOfParent)
  5. 20-F · period ending 2021-12-31 · accession 0000814052-24-000034 (ProfitLossAttributableToOwnersOfParent)
  6. 20-F · period ending 2022-12-31 · accession 0000814052-25-000036 (ProfitLossAttributableToOwnersOfParent)
  7. 20-F · period ending 2020-12-31 · accession 0000814052-23-000035 (CashFlowsFromUsedInOperatingActivities)
  8. 20-F · period ending 2021-12-31 · accession 0000814052-24-000034 (CashFlowsFromUsedInOperatingActivities)
  9. 20-F · period ending 2022-12-31 · accession 0000814052-25-000036 (CashFlowsFromUsedInOperatingActivities)
  10. 20-F · period ending 2020-12-31 · accession 0000814052-21-000034 (Borrowings)
  11. 20-F · period ending 2021-12-31 · accession 0000814052-22-000023 (Borrowings)
  12. 20-F · period ending 2020-12-31 · accession 0000814052-24-000034 (CashAndCashEquivalents)
  13. 20-F · period ending 2021-12-31 · accession 0000814052-25-000036 (CashAndCashEquivalents)