Telefônica Brasil S.A. (VIV), branded as Vivo, is the largest telecommunications operator in Brazil, serving over 100 million mobile and fixed accesses with mobile, fixed-line, broadband, and fiber services across the country.
The company holds a leading position in Brazil’s mobile market and operates one of the country’s largest fiber networks.
Revenue is primarily driven by wireless and data services as customers continue to migrate toward higher-speed connectivity and digital solutions.
On October 31st, 2025, Telefônica Brasil posted its Q3 results. The company generated total revenue of $2.81 billion, up 6.5% year over year.
Growth was driven by continued strength in postpaid mobile, FTTH, and digital services, with mobile service revenue up 5.5% and FTTH revenue up 10.6%.
EBITDA increased 9.0% year over year to $1.22 billion, with the EBITDA margin expanding to 43.4%, reflecting operating leverage despite higher personnel and infrastructure costs.
Net income grew 13.3% year over year to $357 million, while EPS increased 15.6% year over year to $0.11. For FY2025, we expect EPS of $0.70.
Growth Prospects
Over the past decade, Telefônica Brasil’s earnings have been shaped by three main forces. Specifically, the company’s results have been affected by the shift from legacy voice to data and fiber, large network investment cycles, and the Brazilian macro and currency environment.
In the mid-2010s, EPS growth through 2017 and into 2018 was driven by expanding mobile and data revenues, improved service pricing and broader adoption of postpaid and broadband products as legacy voice declined and network investments began to pay off, driving better profitability.
After a weaker 2019–2020 period marked by softer consumer spending and the pandemic, which slowed roaming, equipment sales and put pressure on margins while CapEx stayed elevated, results began to recover in 2021–2022 as demand for high-speed connectivity and enterprise data services strengthened.
In 2023, stronger local-currency net income, driven by continued mobile service growth, fiber expansion and stable margins, lifted earnings, and 2024 saw EPS remain firm as service revenue growth persisted alongside disciplined cost control, even as competitive pressures and investment in 5G and FTTH networks weighed on net margins.
Part of the year-to-year movement in the above U.S.-dollar EPS history also reflects the significant depreciation of the Brazilian real relative to the dollar over this period, which increased EPS volatility when translated into U.S. dollars even if the underlying Brazilian real results grew more steadily.
We forecast 0% growth in EPS and DPS as they can move either way due to the tug-of-war between steady mobile and fiber growth and ongoing competition, heavy investment and costs, and swings in the Brazilian real versus the U.S. dollar, which can materially affect reported results for U.S. investors..
Dividend & Valuation Analysis
Telefônica Brasil has generally traded at a low-teens earnings multiple, which is typical for a large, mature telecom with stable cash flows but limited structural growth.
Today, shares trade at about 19x our expected EPS power, likely showing that investors believe earnings visibility has improved today following a heavy phase of investing.
Still, to account for the lack of overall expected growth from a legacy dinosaur business as well as a “Brazil discount” we have set our fair P/E at 13x.
VIV stock is currently trading at a P/E ratio of 22.4, which means the stock appears to be significantly overvalued. A declining valuation multiple could reduce annual returns by -10.3% over the next five years.
In addition, we expect no EPS growth, and VIV is currently yielding 3.2%. Putting it all together, annual returns are expected to reach -5.8% per year.
Final Thoughts
Telefônica Brasil is a stable, cash-generative market leader with strong competitive positioning, but limited growth and meaningful currency and valuation headwind risks mean the stock may struggle to generate positive returns over the medium term.
For this reason, and the lack of divided growth, we rate the stock a Sell.
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