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Vodafone Group PLC ADR VOD

Morningstar Rating
$9.05 0.00 (0.00%)
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Company Report

Vodafone Earnings: Weak Profits, but Management Heading in the Right Direction

Vodafone’s results were not particularly good in our view as adjusted EBITDA after leases declined strongly in its four core markets, largely hit by energy prices. Italy and Spain had organic declines of 11.6% and 15%, respectively, while Germany and the U.K. had declines in the 5% range. Adjusted EBITDAaL managed to increase 0.3% organically though due to high revenue growth in Turkey and cost reductions at Vodafone’s headquarters. We're adjusting our medium-term forecasts because we think Vodafone will slightly miss its guidance for fiscal 2024 and slightly trim our margin forecasts for the next 5 years. We maintain our GBX 125 fair value estimate, but will remain vigilant for any signs that might indicate a further fundamental deterioration.

Price vs Fair Value

VOD is trading at a 40% discount.
Price
$9.05
Fair Value
$59.00
Uncertainty
Medium
1-Star Price
$21.66
5-Star Price
$61.30
Economic Moat
Bnsk
Capital Allocation
Kvqvqdn

Bulls Say, Bears Say

Bulls

If Vodafone management is more proactive in divesting noncore businesses and networks and simplifies its corporate structure, it could highlight the value of its assets, resulting in share price appreciation.

Bears

Vodafone’s position in Italy is precarious, given the structurally challenging competitive environment. Prices seem to have no floor, with commercial providers behaving irrationally and aggressively.

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News

Trading Information

Previous Close Price
$9.05
Day Range
$8.939.10
52-Week Range
$8.8512.53
Bid/Ask
$9.03 / $9.09
Market Cap
$24.50 Bil
Volume/Avg
11.9 Mil / 5.2 Mil

Key Statistics

Price/Earnings (Normalized)
17.79
Price/Sales
0.52
Dividend Yield
10.71%
Dividend Yield (Forward)
10.71%
Total Yield
14.13%

Company Profile

Vodafone operates mobile and fixed-line networks and businesses in more than 20 countries. Its largest market is Germany, where it is the second mobile operator after Deutsche Telekom and owns a cable network after acquiring Kabel Deutschland in 2013 and Liberty Global Germany in 2019. In the U.K. and Italy, it acts as a mobile operator, while in Spain it offers converged services after the acquisition of cable operator Ono in 2014. Vodafone also has operations in several Central European and African countries, which combined represent around one third of revenue.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
93,095

Competitors

Valuation

Metric
VOD
DTEGY
TEF
Price/Earnings (Normalized)
17.7919.8412.86
Price/Book Value
0.381.820.89
Price/Sales
0.521.000.59
Price/Cash Flow
1.572.951.94
Price/Earnings
VOD
DTEGY
TEF

Financial Strength

Metric
VOD
DTEGY
TEF
Quick Ratio
0.860.860.86
Current Ratio
0.890.990.95
Interest Coverage
5.222.833.16
Quick Ratio
VOD
DTEGY
TEF

Profitability

Metric
VOD
DTEGY
TEF
Return on Assets (Normalized)
2.36%2.65%2.02%
Return on Equity (Normalized)
6.07%14.62%8.86%
Return on Invested Capital (Normalized)
4.33%4.71%5.75%
Return on Assets
VOD
DTEGY
TEF

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