Vodafone Group PLC (LSE: VOD) is a telecommunications services company serving Europe and the international market. Vodafone is an iconic brand offering mobile services to allow customers call, text, and access data, fixed line services, and broadband. The company also provides services in television, and voice and convergence through the GigaKombi and Vodafone One imprints.
The market cap for VOD is $47.83 billion, with shares outstanding being 2.84 billion. Earnings per share is a negative $0.11, and dividend yield is 6.04 per cent. The most recent dividend was $0.53, while shareholders are eagerly waiting for the next earnings call on May 17, 2022.
Vodafone Group PLC Fundamentals
Vodafone is currently not profitable, but its losses have steadily gone down at a rate of 16.5 per cent per year. It’s still not possible to compare the company’s earnings growth over the past year to its 5-year average as it is not profitable at the moment.
Compared to its industry, VOD is unprofitable, but it’s hard to compare its past earnings growth to the Wireless Telecom Industry – 45.1 per cent. Its lack of profit has also meant a negative Return on Equity – -0.59 per cent. Future ROE is forecast to be low in 3 years time – 7.2 per cent.
Company Forecast and Analyst Recommendations
According to 17 Wall Street analysts offering 12-month forecasts for Vodafone Group PLC, the median target for VOD stock is $22.94. However, there is a high estimate of $31.29 and a low estimate of $16.28.
the median estimate represents a significant +38.42 per cent rise from the previous price of $16.58.
The present consensus per 21 polled investment analysts is to “Buy” stock in Vodafone Group PLC. This rating has been steady since the beginning of March, when it remained unchanged from a “Buy” rating.
However, note that in terms of risk analysis, at a dividend score of 3/6, Vodafone’s 5.88 per cent dividends is not well covered by earnings. Whilst the company is paying a dividend to shareholders, it’s currently not profitable.
Moreover, its dividends have not been stable in the past 10 years, and its dividends payments have plummeted in the same period.
Future payout to shareholders is expected to be not impact operations, and in three years, these dividends are expected to be covered by earnings – a 63.8 per cent payout ratio.
Earnings vs. Savings Rate
In all though, VOD is expected to bank profits over the next 3 years, which represents a faster growth rate than savings (0.9 per cent).
Earnings vs. Market
VOD is forecast to become profitable over the next 3 years. This is higher than the average market rate.
Higher Growth Earnings
Vodafone has steadily reduced its losses over 5 years and is, therefore, poised to become profitable in the next 3 years.
Revenue vs. Market
VOD’s 1.5 per cent per year revenue is forecast to grow slower than the UK market’s 4.4 per cent per year.
High Growth Revenue
Vodafone’s 1.5 per cent per year revenue is projected to grow slower than 20 per cent per year.
Cash Runway Analysis
Vodafone Group PLC has been losing money. For companies like it, it is necessary to assess if they have at least a year’s runway of cash.
The verdict is that VOD is unprofitable, but has enough juice to run on for more than 3 years as long as it maintains its present positive free cash flow level. Besides, its free cash flow is growing at 23.1 per cent per year.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only