As the Vodafone share price loses momentum, is it a good buy?

July 31, 2023 01:59 AM PDT | By Invezz

As the Vodafone share price loses momentum, is it a good buy? — Image source: Invezz

Is Vodafone a good buy?

Vodafone, the embattled telecom company, published encouraging results on July 24th. The results revealed that the company’s revenue dropped by 4.2% in its first quarter to €10.7 billion.

Its services revenue fell to €9.1 billion even as the company saw a broad-based service revenue in Europe. Its German business recorded a fifth decline in service revenue. Vodafone Business revenue grew by 4.5%, helped by the digital services business.

Most importantly, Vodafone boosted its forward guidance. It expects that its EBITDAaL will be €13.3 billion while its adjusted free cash flow will be €3.3 billion.

The announcement came at a time when Vodafone is going through a turnaround strategy as pressure from activist investors rise. It is reducing the amount of debt in its balance sheet and effecting some price changes to reflect the inflation state.

The biggest part of its turnaround strategy is its merger with Hutchison’s Three in the UK. Its goal is to create a larger company that has a stronger market share as it competes with the likes of BT and Virgin. Vodafone believes that without the deal, there will be no need for it to invest heavily in the UK.

Vodafone share price have therefore retreated as investors remain concerned about its loss of market share in Germany and the falling revenues Also, there are concerns about the merger with Three and whether the CMA will agree to it. A key concern about the deal is how the company will deal with the inflation-adjusted price increases.

Vodafone share price forecast

The daily chart shows that the VOD stock price has been in a downward trend in the past few months. It has lost over 40% of its value this year. The stock came close to retesting its important resistance level at $79.10, the lowest level in December last year.

Vodafone stock price is loitering near the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has eased its recent momentum. Therefore, I believe that Vodafone shares will likely remain under pressure in the next few months. If this happens, it will likely retest the key support at 70p, the lowest level this year.

The post As the Vodafone share price loses momentum, is it a good buy? appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.