Examining Vodafone Group Plc’s (LSE:VOD) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess VOD’s latest performance announced on 30 September 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Vodafone Group
Could VOD beat the long-term trend and outperform its industry?
I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze various companies on a similar basis, using the latest information. For Vodafone Group, its latest trailing-twelve-month earnings is -€866.00M, which, against the previous year’s level, has become less negative. Since these values are relatively short-term, I’ve created an annualized five-year figure for Vodafone Group’s earnings, which stands at €3.17B.We can further evaluate Vodafone Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Vodafone Group’s revenue growth has been somewhat soft, with an annual growth rate of -0.76%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Viewing growth from a sector-level, the UK wireless telcom industry has been growing, albeit, at a unexciting single-digit rate of 2.25% in the past year, . This is a change from a volatile drop of -3.82% in the last few years. This means despite the fact that Vodafone Group is currently loss-making, whatever near-term headwind the industry is enduring, the impact on Vodafone Group has been softer relative to its peers.
What does this mean?
Though Vodafone Group’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most insightful step is to assess company-specific issues Vodafone Group may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Vodafone Group to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
- 1. Future Outlook: What are well-informed industry analysts predicting for VOD’s future growth? Take a look at this free research report of analyst consensus for VOD’s outlook.
- 2. Financial Health: Is VOD’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.