Vodafone Group Public Ltd Co (VOD)

Price£1.24Cached quoteAs of 2026-09-30 06:53 UTC

AI: Undervalued

Price checkThe shares look undervalued if Vodafone can hold guided cash generation and planned cost savings.

At the recent market value, Vodafone trades at roughly 11–12 times management’s €2.6–€2.9 billion adjusted free cash flow guidance, where free cash flow means cash left after operating needs, investment, interest and other recurring claims. That is not a distressed valuation, but it is modest for a business now guiding to growth. The catch is leverage: the UK buyout was expected to lift net debt near 2.6 times adjusted operating earnings, so the valuation only looks cheap if cash flow remains durable.

Big pictureCash generation is steadier than accounting profit, while debt has fallen materially over several years.

The supplied SEC-derived history shows operating cash flow between about €15.4 billion and €18.1 billion in each of the six years through FY2025, despite large swings in reported profit and asset write-downs. Gross debt fell from about €74.9 billion in FY2020 to €53.1 billion in FY2025, while cash was €11.0 billion. Vodafone’s narrower adjusted net-debt measure was €25.4 billion at FY2026 year-end. Telecom demand is relatively defensive, but currency inflation in Türkiye and Egypt and intense German mobile competition can still move results.

Business strengthScale, Africa growth and shrinking share count improve per-share value, but returns still depend on execution.

FY2026 service revenue grew 5.4% organically and adjusted operating earnings grew 4.5%; Africa grew 12.9%, while Germany was nearly flat for the year before returning to growth late. Vodafone also completed a €2 billion buyback and cancelled about 2.06 billion shares during FY2026, reducing dilution pressure, while the annual dividend rose 2.5% to 4.6125 eurocents per ordinary share. The stronger mix helps, but the business still requires heavy network spending, so headline operating cash flow overstates cash truly available to owners.

What could change the storyThe upside needs UK synergies and steady German recovery; weaker cash flow would erase the discount.

The bull case is specific: VodafoneThree targets £700 million of annual cost and investment synergies by FY2030, Q1 FY2027 service revenue grew 5.2%, and management expects the upper end of €13.0–€13.3 billion adjusted operating earnings and €2.6–€2.9 billion free cash flow. The bear case is equally concrete: Vodafone paid €4.9 billion cash for the remaining UK stake, raising leverage, and Germany remains competitive. If free cash flow stalls near the low end instead of growing, an 11–12 times multiple would look much less compelling.

AI: News

Niel takes anchor stakeA new anchor shareholder paid a premium, signaling confidence and immediately lifting market expectations.

On July 10, Xavier Niel’s Vega agreed to buy e&’s roughly 16.2% Vodafone stake for about £4.4 billion, at a 13% premium to the prior closing market value. Reuters reported Vodafone shares rose about 12% in early trading. The premium is factual; any broader takeover implication is not. Vega said it intends to be a long-term strategic minority holder, while analysts cited possible pressure for faster cost cuts and stronger free cash flow.

First-quarter outlook improvesFirst-quarter growth improved and management now expects results near the top of its annual range.

On July 27, Vodafone reported 5.2% organic service-revenue growth and 6.2% organic adjusted operating-earnings growth. It guided to €13.0–€13.3 billion of adjusted operating earnings and €2.6–€2.9 billion of adjusted free cash flow, expecting the upper end. The update also incorporated Safaricom after control was obtained. Vodafone’s London shares rose as much as 4.3% that day, according to Investing.com; the timing supports association with the update, not proof of sole causation.

UK buyout completesVodafone bought full control of its UK merger, increasing both synergy capture and balance-sheet risk.

On July 30, Vodafone completed the purchase of CK Hutchison’s remaining 49% of VodafoneThree for £4.3 billion, or €4.9 billion, funded from existing cash. Full ownership gives Vodafone all future economics and control over an £11 billion network investment plan, with £700 million of targeted annual cost and capital-spending synergies by FY2030. The trade-off is higher leverage: Reuters had estimated the transaction would lift Vodafone’s net-debt ratio to about 2.6 times.

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016
Revenue	€40.46B	€37.45B	€36.72B	€37.67B	€37.01B	€43.81B	€44.97B	€43.67B	€46.57B	€47.63B	€49.81B
Gross profit	€12.73B	€12.52B	€12.26B	€13.31B	€13.06B	€13.72B	€14.29B	€13.51B	€13.80B	€13.05B	€13.10B
Gross margin	31.47%	33.43%	33.39%	35.34%	35.29%	31.32%	31.78%	30.93%	29.63%	27.41%	26.29%
Operating expenses	€8.99B	€12.93B	€8.59B	€8.07B	€7.32B	€8.59B	€10.19B	€14.46B	€9.50B	€9.33B	€11.78B
Operating income	€3.74B	−€411.0M	€3.67B	€14.45B	€5.74B	€5.13B	€4.10B	−€951.0M	€4.30B	€3.73B	€1.32B
Operating margin	9.25%	−1.10%	9.98%	38.36%	15.51%	11.71%	9.11%	−2.18%	9.23%	7.82%	2.65%
EBITDA	€16.77B	€10.39B	€14.08B	€24.71B	€16.16B	€15.32B	€14.55B	€8.84B	€14.71B	€14.81B	€13.02B
EBITDA margin	41.44%	27.75%	38.34%	65.58%	43.66%	34.96%	32.36%	20.25%	31.58%	31.10%	26.13%
Net income	−€397.0M	−€3.75B	€1.50B	€12.34B	€2.77B	€483.0M	−€455.0M	−€7.64B	€2.79B	−€6.08B	−€5.12B
Net profit margin	−0.98%	−10.00%	4.10%	32.74%	7.49%	1.10%	−1.01%	−17.51%	5.99%	−12.76%	−10.28%
Basic EPSper basic share	-€0.02	-€0.16	€0.04	€0.43	€0.08	€0.00	-€0.03	-€0.29	€0.09	-€0.23	-€0.20
Diluted EPSper diluted share	-€0.02	-€0.16	€0.04	€0.43	€0.08	€0.00	-€0.03	-€0.29	€0.09	-€0.23	-€0.20

Review official source filings ↗

Owners

Reported major voting-rights holders

FCA threshold notices

8.46%of voting rights

Societe GeneraleNotified Jul 13, 2026

View holders

Reported major voting-rights holders of VOD
Holder	Voting rights
Societe Generale	8.46%Jul 13, 2026 · 1.95B votes
BNP PARIBAS SA	5.84%Jul 15, 2026 · 1.35B votes
Credit Agricole S.A.	5.66%Jul 13, 2026 · 1.3B votes

These are threshold-crossing notices, not a complete ownership register. Percentages show issuer voting rights held through the listed share class, exclude financial instruments, and come from different dates. Positions may overlap.

Gray completes the 100% scale; it is not an estimate of other owners.

Source: FCA National Storage Mechanism ↗Updated Sep 27, 2026