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what it is
Vodafone sells mobile and broadband service to more than 300 million customers across Europe and Africa.
how it gets paid
Last year Vod made n/a in revenue. Germany was the main engine at $12.5B, or 31% of sales.
what just happened
Last quarter, Vodafone posted $0.42 EPS versus a $0.48 estimate, a 12.5% miss.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
35/100 earnings predictability — expect surprises
18.5x trailing p/e — priced about right
3.7% dividend yield — cash in your pocket every quarter
4.0% return on capital — nothing to write home about
xvary composite: 65/100 — average
What they do
Vodafone sells mobile and broadband service to more than 300 million customers across Europe and Africa.
Your phone service is sticky because switching carriers means changing numbers, plans, devices, and sometimes your home internet too. Vodafone serves more than 300 million mobile customers, and that scale helps spread network costs across a giant base. Telecom scale (more users sharing fixed network costs) → cheaper operations per customer → you can stay competitive even when prices get ugly.
How they make money
n/a
annual revenue
Germany
$12.5B
United Kingdom
$9.7B
Other Europe
$6.1B
Africa
$8.9B
Turkey
$3.2B
The products that matter
consumer and business connectivity
Mobile services
~300M customers
This is the center of gravity. About 300 million customers sounds like dominance. A 4.0% return on capital says scale has been doing less work than you would like.
core revenue engine
home internet and TV bundle
Fixed broadband
~30% of European service revenue
This matters because it gives Vodafone more than a pure mobile price-war profile. About 30% of European service revenue coming from fixed broadband helps steady the mix, even if it does not solve the margin problem by itself.
defensive mix
next big operating test
Three UK combination
$11.4B committed
This is not a legacy product. It's the strategic bet left on the table. If the combined network earns better returns, Vodafone looks reshaped. If it does not, you are left with a smaller telecom and the same old return problem.
execution swing
Key numbers
$51.0B
long-term debt
That is more debt than the company's roughly $38 billion market cap. Quiet part loud: the balance sheet matters more than the story.
3.7%
dividend yield
Yield (cash income from the stock) → money paid to you while you wait → so what: you get paid today, but the past dividend growth rate is -8.0%.
40.5%
operating margin
Operating margin (profit after running the network) → how much is left before interest and tax → so what: the business looks efficient, but returns on capital are still just 4.0%.
$53B
2027 revenue goal
That compares with $40.4 billion in trailing revenue. The gap is the turnaround case in one number.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 80 / 100
- long-term debt $51.0B (57% of capital)
- net profit margin 7.8% — keeps 8 cents of every dollar in revenue
- return on equity 6% — $0.06 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in VOD 3 years ago → it's now worth $16,360.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Last quarter, Vodafone posted $0.42 EPS versus a $0.48 estimate, a 12.5% miss.
You do not have clean quarterly revenue or margin data here. What you do have is the miss itself, which tells you the turnaround is still uneven.
$0.42
eps
12.5%
surprise
n/a
n/a
the number that mattered
The 12.5% earnings miss matters because this is a stock already carrying $51.0 billion of long-term debt and only 4.0% return on capital.
-
vodafone is settling in after a major transformation.the past two years have seen a $1.4 billion sale of a stake in vantage towers, which, combined with sales of earlier stakes, netted proceeds of $7.3 billion.
-
other major changes included the sales of vodafone italy and vodafone spain operations.
-
the sale of its spain unit netted $4.5 billion in cash and $1 billion in shares, vodafone italy was sold for $8.4 billion, and a 50% reduction in its indian joint venture netted $2.4 billion.
-
these moves amounted to well over half of vodafone's market cap, and played a major role in the telecom's new capital allocation program, which included $4.4 billion in share buybacks, a decrease in leverage, significant headcount reductions, and cutting the dividend in half.vodafone also combined its u.k. business with three u.k. to create a third scaled network operator in that country. vodafone and three u.k. have committed to invest $11.4 billion to create one of europe's most advanced 5g networks.
-
demand is expected to grow with the adoption of technology, such as artificial intelligence (ai).
source: wall street consensus data provided
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What could go wrong
The biggest risk is simple: Vodafone finishes the cleanup and still owns a business that earns only 4.0% on capital. A cleaner company is not automatically a better one.
high
free cash flow stops doing the heavy lifting
The stock leans on a 6.6% free cash flow yield while operating profit has already fallen 9.2%. If cash generation weakens after the dividend cut, the main support under the equity starts to disappear.
would pressure the 3.7% dividend yield and the entire paid-to-wait case
high
$51.0B of debt leaves less room for another operational miss
Long-term debt equals 57% of capital. That is manageable if the business stabilizes. It is a lot less forgiving if the remaining portfolio keeps producing 4.0% returns on capital.
limits flexibility on capex, buybacks, and any attempt to defend the dividend from here
med
the portfolio is cleaner, but also smaller
Spain, Italy, and part of the India position were sold for $4.5B plus $1B in shares, $8.4B, and $2.4B. That creates cash today, but it also removes businesses that used to contribute revenue and profit.
a smaller Vodafone has fewer places to hide if Europe underperforms again
med
the Three UK combination still has to prove the math
Vodafone and Three UK have committed $11.4B to create a scaled 5G network. Big integrations are usually sold as obvious. The bill arrives first. The payoff arrives later, if it arrives.
delays or weak returns would keep the story stuck in restructuring mode
$51.0B of long-term debt equals 57% of capital, so a company earning 4.0% on capital does not have much room for another profit slip.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
fy26 full-year results
Watch for one thing first: does operating profit stabilize after the current 9.2% decline. If it does not, the reset has changed the portfolio more than the economics.
cash flow
free cash flow after the dividend cut
The dividend was cut by 50%. That lowers the burden. If free cash flow still looks stretched after that, you have your answer on how thin the cushion really is.
mix shift
Africa growth versus Europe drag
Africa is about 22% of the revenue shown here. Europe is roughly 70%. You want to see the smaller growth engine matter more without pretending it already does.
execution
Three UK integration and 5G spend
The $11.4B network plan is the main strategic bet left. If returns improve, Vodafone starts to look rebuilt. If costs rise and payback slips, you are still watching a cleanup story.
Analyst rankings
earnings predictability
35 / 100
Low predictability means the reported numbers can move around more than you want. In human-speak: analysts do not see this as a smooth utility-style compounder.
price stability
80 / 100
The stock has looked steadier than the business underneath it. That usually lasts right up until the next number disappoints.
risk rank
3
Middle of the pack on safety. You are not buying distress here. You are also not buying peace and quiet.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 190 buyers vs. 147 sellers in 4q2025. total institutional holdings: 0.2B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$9
$18
$16
current price
$14
target midpoint · 10% from current · 3-5yr high: $30 (+95% · 19% ann'l return)
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