Vodacom Group (VDMCY) AI Stock Analysis

• Market Cap: $17.41B
• Dividend Yield: 3.17%
• Average Volume (3M): 1.30K
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.76
• 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: 15.42
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 3.64
• Enterprise Value/Ebitda: 4.57
• 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: $11.00 ▲(24.86% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is driven primarily by strong financial performance (profitability, cash conversion, and very low leverage) and supportive valuation (low P/E plus dividend yield). Technical indicators are more mixed, with neutral momentum and slight near-term softness versus the 20-day average, tempering the overall score.

Positive Factors

High and stable margins

Sustained gross margins near 61% and a stable ~11% net margin indicate durable pricing power and efficient cost controls across services. These margins support reinvestment in networks and services, cushioning profitability through cycles and enabling consistent cash generation over months.

Strong cash generation

Operating cash flow materially exceeds accounting profit and free cash flow is growing, signaling robust conversion of earnings to cash. This strengthens funding for capex, network upgrades and M&A without needing external financing, enhancing long-term operational flexibility.

Very low leverage

Extremely low debt levels reduce financial risk and interest burden, while an ROE around 18% shows relatively efficient use of equity. Low leverage provides capacity to fund strategic initiatives or absorb shocks, preserving balance-sheet optionality over the medium term.

Negative Factors

Moderate equity buffer

Although leverage is low, equity represents a moderate ~37% of assets which limits the capital cushion against large asset write-downs or aggressive expansion. Over 2-6 months this constraint could force equity or retained earnings reliance for major investments or shocks.

Modest revenue growth

Top-line growth in the high single digits signals steady but not rapid expansion. Without faster revenue acceleration from mobile money, IoT or enterprise services, margin and EBITDA expansion may be constrained, limiting the pace of scale benefits and long-term earnings leverage.

Concentrated African exposure

Heavy operational footprint in multiple African markets increases exposure to regulatory shifts, currency volatility and uneven macro conditions. These structural regional risks can affect long-term cash flows, capital allocation and timing of network investments across jurisdictions.

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

Strong profitability and efficiency (healthy gross margin ~61% and stable net margin ~11%), solid cash generation (operating cash flow well above net income; positive free cash flow growth), and low leverage (debt-to-equity ~0.02). Balance sheet is solid, though equity is a moderate share of assets (~37%).

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: Negative
• Last Price: 8.81
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VDMCY, the sentiment is Negative. The current price of 8.81 is below the 20-day moving average (MA) of 9.66, below the 50-day MA of 9.36, and above the 200-day MA of 8.14, indicating a neutral trend. The MACD of -0.14 indicates Positive momentum. The RSI at 33.12 is Neutral, neither overbought nor oversold. The STOCH value of -0.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$17.41B	7.46	20.71%	3.17%	8.58%	31.38%
TLK	75 Outperform	$17.27B	16.17	15.56%	6.14%	-5.21%	-7.45%
TIMB	73 Outperform	$12.10B	11.93	17.46%	7.82%	-4.90%	14.83%
VIV	70 Outperform	$24.93B	17.32	9.03%	5.03%	-3.16%	4.70%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
VOD	60 Neutral	$33.71B	7.35	-8.37%	3.77%	19.67%	-278.51%
SKM	57 Neutral	$10.81B	27.39	3.37%	5.02%	-8.16%	-52.52%