VOD

We rate VODAFONE GROUP PUBLIC LTD CO (VOD) as a Hold with a composite score of 58.9/100 at a current price of $15.70. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (85th percentile) and stability (69th percentile), which together account for the majority of the composite score. Offsetting weakness in value (33th percentile) and quality (41th percentile) tempers our overall conviction. We assign a No Moat rating (21/100), High uncertainty, and Poor capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; balance sheet deleveraging progress; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

VODAFONE GROUP PUBLIC LTD CO holds a top-quartile position (#0 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 58.9/100 places it at rank #801 in our full 7,333-stock universe. With a $26.3B market capitalization, VODAFONE GROUP PUBLIC LTD CO operates at meaningful scale within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, providing competitive advantages in distribution, procurement, and customer reach.

The outlook is moderately positive, with revenue expanding at 2% and favorable momentum (85th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.

The margin cascade tells an important story: gross margins of 33% (-21.7pp vs sector) narrow to operating margins of -1% (-18.7pp vs sector) and net margins of -10.0%, yielding a gross-to-net conversion rate of -30%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $15.70, VODAFONE GROUP PUBLIC LTD CO is trading at a premium to fundamental value. Our value factor score of 33/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at P/B of 0.6x, P/S of 0.2x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a High uncertainty rating to VODAFONE GROUP PUBLIC LTD CO. Key risk factors include significant leverage (101% debt-to-equity), current negative profitability (net margin -10.0%), low beta of 0.34 — while defensive, this may indicate limited upside participation in bull markets. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (101% debt-to-equity); current negative profitability (net margin -10.0%); low beta of 0.34 — while defensive, this may indicate limited upside participation in bull markets; the combination of leverage (101% D/E) and thin margins (-10.0% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 69th percentile and quality factor at the 41th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (69th percentile) suggests predictable business dynamics; a 7.92% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate VODAFONE GROUP PUBLIC LTD CO's capital allocation as Poor. Key concerns include low returns on equity (-28.4%), negative profitability, weak asset returns (ROA -11.7%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — VODAFONE GROUP PUBLIC LTD CO significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, VODAFONE GROUP PUBLIC LTD CO receives a Hold rating with a composite score of 58.9/100 (rank #801 of 7,333). Our quantitative framework assigns a No Moat (21/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 58/100.

Our analysis supports a neutral stance on VODAFONE GROUP PUBLIC LTD CO. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.