Vodafone Share Price: Is this Serial Underperformer a Good Buy?

Summary:
• The Vodafone share price plunged to the lowest level since March 16 2020. It has plunged by more than 32% from the highest level this year.

The Vodafone share price plunged to the lowest level since March 16, 2020. It has plunged by more than 32% from its highest level this year. The VOD stock has plunged by more than 62% from its highest level in 2015. It has fallen by 15% this year, meaning it has underperformed the FTSE 100, which has dropped by about 1% this year.

Vodafone is in trouble

Vodafone stock price has been a major disappointment in the past few years. The company has seen its annual revenue crash from over $57 billion in 2018 to about $50 billion in 2021. In the trailing twelve months, the company’s revenue has dropped to about $45 billion. Its net income has also dropped to about $2 billion.

Vodafone stock crashed after the company published weak financial results for the first half of the year. Its group revenue rose slightly to €22.9 billion in the first half from the previous €22.48 billion. Its operating profit rose from €2.6 billion to €2.9 billion in the first half of this year.

Vodafone share price collapsed as the company increased its total net debt by €3.9 billion to €45.5 billion. This growth in debt was driven by a significant cash outflow of €3.2 billion, equity dividends of €1.3 billion, and share buybacks of €1 billion. 

Vodafone struggled as revenue in Germany, its biggest market contracted. Therefore, the company is working to save €1 billion in the next few years. Analysts seem to be positive about the company. Those at Barclays expect that the company’s stock price will rise to 120p. Similarly, those at Deutsche Bank, Bernstein, JP Morgan, and Goldman Sachs expect the shares to rise to over 120p in the near term.

Vodafone share price forecast

The daily chart shows that the VOD stock price has been in a strong bearish trend in the past few months. This decline culminated in the stock falling below the important support at 97.50p in October. The stock has moved below all moving averages while the Relative Strength Index (RSI) has moved below the neutral level.

Therefore, Vodafone share price will likely continue falling as sellers target the key support level at 90p. A move above the resistance at 100p.