Vodacom Group (VDMCY) AI Stock Analysis

• Market Cap: $18.78B
• Dividend Yield: 3.17%
• Average Volume (3M): 1.30K
• Price to Earnings (P/E): 17.7
• Beta (1Y): 0.69
• Revenue Growth: 8.58%
• EPS Growth: 31.38%
• Country: US
• Employees: 7,642
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): N/A
• Shares Outstanding: 2,077,841,300
• 10 Day Avg. Volume: 535
• 30 Day Avg. Volume: 1,300
• PEG Ratio: 3.89
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 1.64
• P/FCF Ratio: 8.90
• Enterprise Value/Market Cap: 15.17
• Enterprise Value/Revenue: 1.83
• Enterprise Value/Gross Profit: 3.86
• Enterprise Value/Ebitda: 4.85
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 79 Outperform
• Price Target: $11.50 ▲(30.53% Upside)
• Action: Reiterated Date: 11/11/25
• Date: Action: Reiterated 11/11/25

Vodacom's strong financial performance and positive earnings call are the most significant factors driving the score. The company's solid financial health, impressive growth in revenue and customer base, and attractive dividend yield contribute positively. However, mixed technical indicators and challenges in South Africa's market slightly offset these strengths.

Positive Factors

Strong cash generation

Vodacom converts profit into cash very efficiently, with operating cash flows well above net income and positive free cash flow growth. This durable cash generation supports sustained capex for network rollout, dividend increases and strategic investments without materially raising leverage.

Customer & financial-services expansion

Rapid customer growth and a materially larger financial-services footprint (M-Pesa-related users and transaction value growth) diversify revenue away from legacy voice. Financial services contributing a quarter of PBT creates a durable, higher-margin earnings stream and cross-sell runway across markets.

Low leverage / solid balance sheet

Extremely low reported leverage gives Vodacom financial flexibility to fund growth, absorb shocks, and maintain distributions. Combined with decent ROE, the balance-sheet profile supports capital allocation for international expansion and network investment without compromising solvency.

Negative Factors

South Africa prepaid weakness

Prepaid volumes are a structural revenue base in Vodacom's domestic market; persistent declines reflect consumer pressure and competitive dynamics. Continued weakness here can depress domestic revenue and margins, limiting near-term growth while management reallocates focus to international and financial services.

Structural voice revenue pressure

Ongoing OTT substitution and aggressive competitive pricing structurally reduce voice ARPU and core revenue. This trend forces capital and commercial shifts to data and financial services, potentially compressing margins and requiring sustained investment to offset legacy declines.

Moderate equity ratio limits buffer

While leverage is low, an equity ratio near 37% implies limited equity cushion relative to assets. That moderate base reduces the natural shock absorber for asset write-downs or adverse macro moves, potentially constraining aggressive M&A or dividend hikes without changing capital structure.

Vodacom Group Business Overview & Revenue Model

Company Description

Vodacom Group Limited operates as a connectivity, digital, and financial services company in South Africa and internationally. It offers range of communication services, including data, mobile and fixed voice, messaging, financial services, enterprise IT, and converged services. The company also provides mobile and fixed line connectivity solutions, as well as internet and virtual private network services to its customers over various wireless, fixed-line, satellite, mobile, and converged technologies; and cloud hosting and security services comprising infrastructure as a service, platform as a service, software as a service, security services, hosted applications, and primary and direct connectivity to all hyperscalers. In addition, it offers carrier service products, including wholesale APN data, microwave, managed satellite, WiFi, international private leased circuit, IP transit, fiber, and IP-VPN; ethernet over MPLS, carrier ethernet, cloud connect, dedicated internet access, broadband internet access, software-defined WAN, and VSAT services; sensors and other electronic devices that are attached to a remote machine enabling the capturing of critical information, such as temperature, speed, location, etc.; and digital financial services for personal finance and business solutions. Further, the company offers and SmartCitizen mobile app to provide transparency and accountability with services, such as water and sanitation, roads, education, and health. The company was founded in 1993 and is headquartered in Midrand, South Africa. Vodacom Group Limited is a subsidiary of Vodafone Investments SA (Pty) Limited.

How the Company Makes Money

Vodacom generates revenue through multiple streams, primarily from mobile voice and data services, which include prepaid and postpaid plans for individuals and businesses. The company also earns income from value-added services such as mobile money (Vodacom's M-Pesa), which allows users to transfer money, pay bills, and make purchases. Additionally, fixed-line services and broadband subscriptions contribute to its revenue. Key partnerships with various content providers and businesses enhance Vodacom's offerings, enabling cross-selling of services. The company's strategic focus on expanding its IoT and financial services segments further diversifies its income sources, making it more resilient to fluctuations in traditional telecom revenues.

Vodacom Group Financial Statement Overview

Summary

Vodacom Group demonstrates solid financial health with strong profitability and growth trends in the income statement, a stable balance sheet with low leverage, and impressive cash flow metrics. The company is well-positioned financially, with robust performance across key metrics.

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.

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.

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.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	156.04B	152.23B	150.59B	6.97B	6.88B	5.98B
Gross Profit	73.74B	92.89B	82.76B	2.76B	2.81B	2.42B
EBITDA	58.80B	58.80B	59.07B	44.61B	43.45B	43.09B
Net Income	18.49B	16.60B	16.29B	985.68M	1.16B	1.01B
Balance Sheet
Total Assets	249.76B	249.98B	240.61B	12.87B	12.18B	11.65B
Cash, Cash Equivalents and Short-Term Investments	24.78B	27.17B	34.84B	1.30B	1.25B	1.50B
Total Debt	79.97B	2.09B	73.48B	3.96B	3.59B	3.38B
Total Liabilities	146.48B	146.33B	136.78B	7.38B	6.33B	5.84B
Stockholders Equity	90.11B	92.02B	92.76B	4.84B	5.44B	5.38B
Cash Flow
Free Cash Flow	30.84B	28.11B	26.69B	1.22B	1.30B	1.24B
Operating Cash Flow	55.24B	52.80B	49.01B	2.40B	2.23B	2.06B
Investing Cash Flow	-27.01B	-24.21B	-20.72B	-1.88B	-1.04B	-814.02M
Financing Cash Flow	-20.54B	-25.86B	-25.70B	-375.41M	-1.09B	-1.20B

Vodacom Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VDMCY, the sentiment is Positive. The current price of 8.81 is below the 20-day moving average (MA) of 9.85, below the 50-day MA of 9.18, and above the 200-day MA of 8.05, indicating a bullish trend. The MACD of 0.28 indicates Positive momentum. The RSI at 62.81 is Neutral, neither overbought nor oversold. The STOCH value of 73.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VDMCY.

Vodacom Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VDMCY	79 Outperform	$18.78B	17.68	18.39%	3.17%	8.58%	31.38%
TLK	75 Outperform	$20.27B	15.33	15.54%	6.14%	-5.21%	-7.45%
TIMB	73 Outperform	$12.12B	15.92	17.96%	7.82%	-4.90%	14.83%
VIV	70 Outperform	$25.32B	22.93	9.34%	5.03%	-3.16%	4.70%
SKM	61 Neutral	$11.28B	42.53	3.10%	5.02%	-8.16%	-52.52%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
VOD	60 Neutral	$34.32B	-8.12	-7.08%	3.77%	19.67%	-278.51%