Telefonica (TEF) Fair Value & Analysis

Communication Services · ES · Market cap €20.4B · ISIN ES0178430E18

What is Telefonica really worth?

What runs behind every stock

26 valuation models 8 families, DCF to NCAV 37 quality factors margins, balance sheet, cashflow, debt 6 AI factors moat, what no ratio measures 2,000+ data points verified, per stock, median

69 individual criteria per stock, every one traceable See the method →

What matters now

• The large discount to fair value meets weak quality (38/100). That raises the risk this is a value trap rather than a bargain.
• The price is below even our cautious bear case (€4.61). The market is more pessimistic than our downside scenario.
• The model range is unusually wide (€4.61 to €12.47). The outcome hinges heavily on assumptions, so read the point estimate with caution.

Price vs Fair Value (5 years)

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 29, 2026.

How to read this chart

60‑month range €2.53 – €4.57 · fair‑value band €4.61 – €12.47 · the €3.68 price screens below the €7.28 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Aug 29, 2026.

Full chart & analysis →

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Analysis

Telefonica (TEF) currently trades at €3.68, while our model-based Fair Value estimate is €7.28, implying the stock looks roughly 49.4% undervalued today. The Quality Score stands at 38/100 (below-average quality), in the Communication Services sector. Bull case: the DCF Models group reads highest at a median of €7.38 per share, and 6 of the 13 models we run sit above the €3.68 price. Bear case: the Multiples group reads lowest at €1.41, and 7 of the 13 models stay below the price. Evidence for this calculation is medium.

Over the trailing twelve months, Telefonica generated revenue of €35.9B at a net margin of −9.5%. Revenue declined 12.4% year over year. It earns a return on equity of −8.9%. Net debt stands at €41.0B. Fundamentals as of Aug 29, 2026

Our scenario range runs from €4.61 (bear case) to €12.47 (bull case); at €3.68, the current price sits below that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 22% below its 52-week high and 14% above its 52-week low, currently below its 200-day average. For context, the median of 10 Communication Services peers we cover trades at 30% fair-value upside, at 98%, TEF screens cheaper than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.

Widest divergence: DCF Models (€7.38) versus Multiples (€1.41). Highest evidence: FCF DCF (77).

Key figures & financial health

Quality Score breakdown

About the company

Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Europe and Latin America. The company offers mobile and related services and products, including mobile voice, value added, mobile data and internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services; traditional fixed telecommunication …

Full company description

Telefónica, S.A., together with its subsidiaries, provides telecommunications services in Europe and Latin America. The company offers mobile and related services and products, including mobile voice, value added, mobile data and internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services; traditional fixed telecommunication services, such as PSTN lines; ISDN accesses; public telephone services; local, domestic, and international long-distance and fixed-to-mobile communications; corporate communications; supplementary value-added services; video telephony; intelligent network; telephony information services; and leases and sells handset equipment. It also provides internet provider service; portal and network, retail and wholesale broadband access, narrowband switched access and other technologies, internet through fibre to the home, very high bit-rate digital subscriber line, and voice over internet protocol services; leased line, virtual private network, fibre optics, web and managed hosting, content delivery and application, security, and outsourcing and consultancy services, including network management or CGP; and desktop, system integration, and professional services. In addition, the company offers wholesale services for telecommunication operators, such as domestic interconnection and international wholesale services; leased lines for other operators; and local loop leasing services, as well as bit stream services, wholesale line rental accesses, and leased ducts for other operators' fiber deployment. Further, it provides video/TV services; smart connectivity and services; financial and other payment, cloud, security, advertising, and big data services; digital products; Aura, an artificial-intelligence ecosystem; Movistar Home device; open gateway; living apps; smart Wi-Fi; NT; Solar 360; and Phoenix, a digital sales platform. Telefónica, S.A. was incorporated in 1924 and is headquartered in Madrid, Spain.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

Telefonica reported revenue of €35.1B in FY2025 versus €39.3B in FY2021, a compound −2.8%/yr. Reported net income was −€4.3B in FY2025.

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Earlier news

External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.

• Telefonica SA (TELFY) Q2 2026 Earnings Call Highlights: Strong Growth in Spain and Brazil Amid ... Yahoo Finance · Jul 29, 2026
• Telefonica Q2 Earnings Call Highlights Yahoo Finance · Jul 29, 2026

Peer Group

Telecom Services · 248 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Valuation Multiples vs Telecom Services median · lower = cheaper

Strength profile in five axes (Snowflake)

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

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