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Vodacom Group Limited (VDMCY)
OTHER OTC:VDMCY
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Vodacom Group
(OTC:VDMCY)
Rating:78Outperform
Price Target:
$9.00
â–²(17.49% Upside)
Vodacom Group (VDMCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.84B
Dividend Yield1.49%
Average Volume (3M)1.38K
Price to Earnings (P/E)16.3
Beta (1Y)0.68
Revenue Growth3.88%
EPS Growth4.83%
CountryUS
Employees7,642
SectorCommunication Services
Sector Strength93
IndustryTelecommunications Services
Share Statistics
EPS (TTM)N/A
Shares Outstanding2,077,841,300
10 Day Avg. Volume873
30 Day Avg. Volume1,375
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue0.11
Enterprise Value/Gross Profit0.20
Enterprise Value/Ebitda0.31
Forecast
1Y Price Target
$9.00Price Target Upside17.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Vodacom Group Business Overview & Revenue Model
Company DescriptionVodacom Group (VDMCY) is a leading telecommunications company based in South Africa, providing a wide range of communication services across multiple sectors, including mobile voice, messaging, data, and fixed-line services. Established in 1994, Vodacom operates primarily in South Africa but also has significant operations in several African countries, including Tanzania, Mozambique, and the Democratic Republic of the Congo. The company offers core products and services such as mobile network services, mobile banking, IoT solutions, and digital services, aiming to enhance connectivity and digital inclusion across the continent.
How the Company Makes MoneyVodacom generates revenue primarily through its mobile network services, which include voice calls, SMS, and data services. The company has a robust subscriber base, with revenue significantly driven by data usage as consumers increasingly rely on mobile internet for communication and entertainment. Additionally, Vodacom earns income from value-added services such as mobile banking through its M-Pesa platform, mobile advertising, and partnerships with content providers. The company also benefits from fixed-line services, including broadband and enterprise solutions, catering to both individual and corporate clients. Strategic partnerships with technology firms and fintech companies enhance its service offerings and create new revenue streams. Overall, Vodacom's diversified portfolio and focus on innovation play a crucial role in sustaining its financial performance.
Vodacom Group Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: -6.24%|
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong growth in financial services and data revenue, especially in Egypt, offset by significant challenges from currency devaluations impacting earnings, and setbacks in the fiber strategy in South Africa. Despite these challenges, the company is optimistic about future growth potential.Q2-2025 Updates
Positive Updates
Significant Customer Base Growth
Vodacom now connects 206 million customers and provides financial services to 83 million customers, marking significant milestones in the company's history.
Strong Financial Services Growth
Financial Services business was up 7.8% in rands or 17.6% on a normalized basis, contributing 11.4% to group service revenue.
Expansion in 4G Coverage
Vodacom added 1,133 new 4G sites across the group in the last six months, aiming to close the digital divide.
Impressive Performance in Egypt
Local currency revenue growth in Egypt was 44.1%, with financial services growing 94.4%. Egypt's EBITDA margins improved to 43.4%.
Data Revenue Growth
Prepaid data makes up 28.2% of service revenue and grew 21.8% in the period.
Negative Updates
Currency Devaluation Impact
Earnings were significantly impacted by currency devaluations in Egypt and Ethiopia, with HEPS declining 19.4% to 353 cents.
International Business EBITDA Decline
International business EBITDA was ZAR4.3 billion and declined by 20% due to foreign exchange pressures and one-off costs in the DRC.
Disappointment in South Africa Fiber Deal
The MAZIV transaction was prohibited by the competition tribunal, impacting Vodacom's fiber strategy in South Africa.
Prepaid Voice Revenue Decline
Prepaid voice revenue declined by 3.4% in the period, indicating a challenge in maintaining this revenue stream.
Tax Rate Increase
The effective tax rate was 38.4%, significantly above the statutory rate of 27%, due to various one-off factors and non-deductible finance costs.
Company Guidance
In the latest call, Vodacom Group outlined strong commercial momentum despite challenging currency headwinds, targeting high-single-digit growth in service revenue and EBITDA over the medium term. The group served 206 million customers, with 83 million using financial services, and aimed to expand this to 120 million by 2030. Financial services contributed 11.4% to group service revenue, with a 17.6% underlying growth trend, supported by over $421 billion in annual mobile money transactions. Additionally, Vodacom focused on digital inclusion, adding 1,133 new 4G sites and targeting the connection of 300 million customers. The group's financial results were impacted by currency devaluations in Egypt and Ethiopia, leading to a 19.4% decline in HEPS to 353 cents, although normalized group service revenue grew by 9.9%. Capital intensity was maintained within a 13% to 14.5% revenue range, with the group spending ZAR8.8 billion so far. The Board declared an interim dividend of 285 cents per share. Despite challenges, Vodacom emphasized its commitment to connectivity, financial inclusion, and sustainable growth across its African markets.Vodacom Group Financial Statement Overview
Summary
Vodacom Group demonstrates solid financial health across all verticals. The income statement shows strong profitability and growth trends with increasing revenues and healthy profit margins. The balance sheet is stable with low leverage, though there is potential for enhancing equity strength. Cash flows are impressive, with strong operational cash generation.Income Statement
The company shows a strong income statement performance with consistent revenue growth, increasing from 150.59 billion to 152.23 billion annually. Gross profit margin is healthy at approximately 61%, and the net profit margin is stable around 11%. EBIT and EBITDA margins are robust, reflecting efficient operations and cost management. The revenue growth rate from the previous year is positive, indicating continued expansion.86
Very Positive
Balance Sheet
The balance sheet reveals a solid financial structure with a low debt-to-equity ratio of 0.02, indicating low leverage and reduced financial risk. The return on equity is decent at approximately 18%, suggesting effective use of shareholder funds. However, the equity ratio is moderate, with stockholders' equity constituting about 37% of total assets, implying room for strengthening the equity base.78
Positive
Cash Flow
Cash flow metrics are strong, with robust operating cash flows exceeding net income, highlighting good cash generation capabilities. Free cash flow growth is positive at 5.34%, demonstrating effective capital expenditure management. The operating cash flow to net income ratio is approximately 3.18, indicating efficient conversion of profit to cash.82
Very Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 152.23B | 150.59B | 6.97B | 6.88B | 5.98B |
| Gross Profit | 92.89B | 82.76B | 2.76B | 2.81B | 2.42B |
| EBITDA | 58.80B | 59.07B | 44.61B | 43.45B | 43.09B |
| Net Income | 16.60B | 16.29B | 985.68M | 1.16B | 1.01B |
Balance Sheet | |||||
| Total Assets | 249.98B | 240.61B | 12.87B | 12.18B | 11.65B |
| Cash, Cash Equivalents and Short-Term Investments | 27.17B | 34.84B | 1.30B | 1.25B | 1.50B |
| Total Debt | 2.09B | 73.48B | 3.96B | 3.59B | 3.38B |
| Total Liabilities | 146.33B | 136.78B | 7.38B | 6.33B | 5.84B |
| Stockholders Equity | 92.02B | 92.76B | 4.84B | 5.44B | 5.38B |
Cash Flow | |||||
| Free Cash Flow | 28.11B | 26.69B | 1.22B | 1.30B | 1.24B |
| Operating Cash Flow | 52.80B | 49.01B | 2.40B | 2.23B | 2.06B |
| Investing Cash Flow | -24.21B | -20.72B | -1.88B | -1.04B | -814.02M |
| Financing Cash Flow | -25.86B | -25.70B | -375.41M | -1.09B | -1.20B |
Vodacom Group Technical Analysis
Neutral
7.66
Price Trends
7.66
Positive
7.25
Positive
6.54
Positive
Market Momentum
<0.01
Positive
48.29
Neutral
74.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VDMCY, the sentiment is Neutral. The current price of 7.66 is below the 20-day moving average (MA) of 7.76, above the 50-day MA of 7.66, and above the 200-day MA of 6.54, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 48.29 is Neutral, neither overbought nor oversold. The STOCH value of 74.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VDMCY.
Vodacom Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $19.63B | 19.49 | 8.20% | 3.53% | -6.51% | -0.21% | |
79 Outperform | $10.07B | 16.04 | 13.78% | 5.68% | -7.99% | 2.16% | |
78 Outperform | $14.84B | 16.25 | 18.39% | 1.49% | 3.88% | 4.83% | |
74 Outperform | $17.93B | 12.83 | 17.71% | 6.66% | -5.13% | -5.90% | |
68 Neutral | $8.62B | 12.14 | 11.08% | 4.42% | -4.74% | -16.23% | |
62 Neutral | $27.87B | 9.21 | -7.17% | 4.29% | 0.89% | -494.16% | |
60 Neutral | $43.99B | 4.18 | -7.47% | 4.06% | 2.47% | -40.32% |
* Communication Services Sector Average
Performance Comparison
VDMCY
Vodacom Group
7.89
2.65
50.57%
TLK
PT Telekomunikasi Indonesia Tbk
19.31
2.13
12.40%
SKM
Sk Telecom
22.62
0.06
0.27%
VIV
Telefonica Brasil
12.24
3.35
37.68%
TIMB
TIM
20.50
5.49
36.58%
VOD
Vodafone
11.54
2.52
27.94%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.