Telefonica Brasil S.a. (VIV)

Price$11.66Cached quoteAs of 2026-09-05 07:49 UTC

AI: Undervalued

Price checkThe shares look undervalued because cash generation is strong while the market demands modest growth.

At the observed quote, one U.S. depositary share costs about 15 times 2025 earnings, about 14 times trailing earnings, and roughly eight times 2025 free cash flow. Free cash flow means cash left after running and investing in the business: operating cash of R$20.7 billion minus R$9.5 billion of capital spending produced about R$11.3 billion. Because each depositary share represents two common shares, the comparison is normalized correctly. Recent earnings growth makes those multiples look conservative rather than distressed. SEC+2StockAnalysis.com+2

Big pictureRevenue keeps growing, but cash growth is slower because networks still absorb heavy investment.

From 2020 to 2025, revenue rose from R$43.1 billion to R$59.6 billion, while operating income climbed from R$6.6 billion to R$9.9 billion and net income from R$4.8 billion to R$6.2 billion. Operating cash rose much less, and free cash flow stayed near R$11 billion because network spending remained heavy. In the second quarter of 2026, revenue grew 7.6% and operating profit before depreciation grew 10.9%, but free cash flow fell 10.7% on taxes and working-capital timing. Mobile and fiber demand is relatively defensive; device sales are more cyclical. SEC+1

Business strengthA leading subscriber base, improving margins, and manageable debt give the business solid downside protection.

The second quarter ended with 118.8 million customer connections, including 105.1 million mobile lines and 8.2 million fiber customers. Postpaid connections grew 6.9% and customer cancellations stayed low, supporting recurring revenue. The 2025 operating margin improved to about 16.5% from 15.3% in 2020. At June 2026, the company had R$3.8 billion of net cash excluding leases, but R$11.0 billion of net debt including leases. Most borrowings are in local currency and foreign-exchange exposure is hedged, though R$7.3 billion of disputed telecom fees sits outside reported debt. SEC+2SEC+2

What could change the storyThe thesis improves if growth stays near recent levels and weakens if cash returns outrun cash creation.

The bull case is continued mid-to-high single-digit revenue growth, double-digit operating profit growth, and a roughly R$0.3 billion quarterly depreciation tailwind from legacy assets after mid-2026. The bear case is that cash generation fails to keep pace with payouts: second-quarter free cash flow fell, and the large 2026 distributions include a R$4.0 billion capital reduction that is not recurring profit. Capital allocation has still been shareholder-friendly: outstanding shares fell about 1.8% during 2025, a new buyback allows up to R$1.0 billion, and the FiBrasil merger issued no new shares. U.S. holders also face Brazilian-currency risk. SEC+3SEC+3SEC+3

AI: News

Second-quarter growthSecond-quarter profits grew strongly, but weaker cash generation gave investors a reason to stay cautious.

On July 27, the company reported second-quarter revenue of R$15.8 billion, up 7.6%, operating profit before depreciation of R$6.6 billion, up 10.9%, and net income of R$1.57 billion, up 17.0%. Free cash flow fell 10.7% to R$2.66 billion because of higher taxes and less working-capital help. Reuters described the overall result as broadly in line with expectations. The U.S. shares fell about 6.8% the next session, but that timing alone does not prove the results caused the decline. UOL Economia+2SEC+2

Large capital returnA four-billion-real capital return rewarded owners, but it should not be mistaken for recurring earnings.

The R$4.0 billion capital reduction became effective in May and was paid on July 14. By late July, total 2026 cash distributed to shareholders had reached R$6.99 billion, 31.6% above the comparable 2025 period, including R$2.99 billion of previously declared interest on equity. This directly returns excess capital to owners, but it also reduces company cash and should not be valued like repeating operating profit. Any share-price move around entitlement dates can include mechanical adjustment, so attribution is uncertain. SEC+1

FiBrasil fully absorbedTelefônica Brasil completed control of FiBrasil and folded the fiber unit into the parent without issuing shares.

On May 18, Telefônica Brasil bought the remaining 24.99% of FiBrasil from Telefónica Infra for R$458.7 million. Shareholders then approved the merger on July 31, effective August 1, absorbing FiBrasil into Telefônica Brasil at a book equity value of R$812.6 million. The merger issued no new shares, so there was no dilution. It simplifies control of the fiber network and may cut duplicated costs, but the company also expects to assume about R$0.9 billion of FiBrasil debt. No clean market reaction can be isolated. SEC+3SEC+3SEC+3

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	R$59.59B	R$55.85B	R$52.10B	R$48.04B	R$44.03B	R$43.13B	R$44.27B	R$43.46B	R$43.21B	R$42.51B	R$40.29B
Gross profit	R$26.67B	R$24.49B	R$22.68B	R$20.61B	R$19.25B	R$20.43B	R$22.11B	R$22.44B	R$22.93B	R$21.69B	R$19.94B
Gross margin	44.75%	43.86%	43.54%	42.90%	43.72%	47.38%	49.94%	51.62%	53.08%	51.01%	49.50%
Operating expenses	R$50.05B	R$47.51B	R$44.81B	R$42.01B	R$38.99B	R$37.09B	R$37.36B	R$36.46B	R$35.85B	R$36.07B	R$34.49B
Operating income	R$9.86B	R$8.67B	R$7.92B	R$6.60B	R$7.09B	R$6.58B	R$7.21B	R$9.46B	R$6.63B	R$6.37B	R$5.24B
Operating margin	16.54%	15.53%	15.20%	13.73%	16.09%	15.26%	16.30%	21.76%	15.35%	14.98%	13.01%
EBITDA	R$24.80B	R$22.88B	R$21.31B	R$19.26B	R$19.12B	R$17.81B	R$18.13B	R$17.82B	R$14.49B	R$14.02B	R$12.05B
EBITDA margin	41.62%	40.96%	40.90%	40.09%	43.43%	41.30%	40.97%	41.01%	33.53%	32.99%	29.92%
Net income	R$6.18B	R$5.56B	R$5.04B	R$4.06B	R$6.23B	R$4.77B	R$5.00B	R$8.93B	R$4.61B	R$4.09B	R$3.42B
Net profit margin	10.37%	9.95%	9.67%	8.45%	14.15%	11.06%	11.30%	20.54%	10.67%	9.61%	8.49%
Basic EPSper basic share	R$1.91	R$1.69	R$1.52	R$2.44	R$3.71	—	—	—	—	—	—
Diluted EPSper diluted share	R$1.91	R$1.69	R$1.52	R$2.44	R$3.71	—	—	—	—	—	—

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of VIV
Holder	Shares held
Robeco Institutional Asset Management B.V.	15.41M
BlackRock, Inc.	6.5M
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	4.19M
BRANDES INVESTMENT PARTNERS, LP	3.96M
Invesco Ltd.	3.71M
Aberdeen Group plc	2.96M
NOMURA ASSET MANAGEMENT INTERNATIONAL INC.	1.63M
Amundi	1.22M
RENAISSANCE TECHNOLOGIES LLC	1.21M
MORGAN STANLEY	1.01M
ENVESTNET ASSET MANAGEMENT INC	910.7K
O'SHAUGHNESSY ASSET MANAGEMENT, LLC	862.07K
VANGUARD CAPITAL MANAGEMENT LLC	827.49K
Connor, Clark & Lunn Investment Management Ltd.	769.18K
WELLS FARGO & COMPANY/MN	760.26K
Tredje AP-fonden	706.75K
ROYAL BANK OF CANADA	627.11K
Creative Planning	592.78K
STRS OHIO	586.86K
BANK OF AMERICA CORP /DE/	563K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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Telefonica Brasil S.a. (VIV)

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