While shareholders of Vodafone Idea (NSE:IDEA) are in the black over 5 years, those who bought a week ago aren't so fortunate

Some Vodafone Idea Limited (NSE:IDEA) shareholders are probably rather concerned to see the share price fall 52% over the last three months. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 78%, less than the market return of 165%.

Since the long term performance has been good but there's been a recent pullback of 15%, let's check if the fundamentals match the share price.

See our latest analysis for Vodafone Idea

Because Vodafone Idea made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last half decade Vodafone Idea's revenue has actually been trending down at about 1.2% per year. The falling revenue is arguably somewhat reflected in the lacklustre return of 12% per year over that time. Arguably that's not bad given the soft revenue and loss-making position. Of course, a closer look at the bottom line - and any available analyst forecasts - could reveal an opportunity (if they point to future growth).

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Vodafone Idea is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Investors in Vodafone Idea had a tough year, with a total loss of 30%, against a market gain of about 38%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 12%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Vodafone Idea better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Vodafone Idea (of which 1 is concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.