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Telefónica, S.A.

TELFY
28
Telecommunications Services · Communication Services
Price
$4.10
+0.08 (+1.99%)
Market Cap
$23.12B
Exchange
Other OTC
Winston Score
28
Winston is worried
Below-average fundamentals — multiple weak pillars.
Data as of Jul 28, 2026 · filings through Mar 31, 2026

Share count falling — buybacks

1.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 5.73B (2021) → 5.64B (2025)

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.

Winston Score History

Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-10.4% YoY

YoY Growth Rate

Revenue declining

EPS Growth

+67.6% YoY

YoY Growth Rate

Strong earnings growth

R&D Spend

$964M/ year

Rising (+49% vs prior year)

2.9% of revenue

Below sector average (12%)

R&D investment increasing — building for the future

Cash Position

Cash flow positive

$14.5B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Telefónica, S.A.'s revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin
10.2%
Thin — 10.2% gross margin
Operating Margin
13.8%
Healthy — 13.8% operating margin
ROCE
2.2%
Weak — 2.2% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
-12.1%
Shrinking sales (-12.1% YoY)
EPS YoY
N/A
Data not available
EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
N/A
Data not available
FCF Margin
13.5%
Converts sales into free cash efficiently (13.5%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity
2.48
Heavy debt load (2.48)
Interest Cover
0.80x
Dangerous — barely covers interest (0.8x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

P/E Ratio (TTM)
N/M
Negative earnings — P/E not meaningful
P/E vs Forward
N/A
not available
Data not available

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Dividends

Dividend Yield
7.99%
Healthy income — 7.99% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth
+4.2%
Dividend growing modestly (4.2% YoY)

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