Vodafone Group Plc (LON: VOD) Facilitates telecommunications services in Europe and worldwide, offering mobile and fixed-line options for calling, texting, and accessing data. The VOD share price is near its lowest since 1995. That may seem like a once-in-a-lifetime opportunity to buy this dip. However, looking into the company’s financials, it is not. The company is struggling on and off the charts to survive, planning to cut more than 11k jobs.
Last Year’s Annual report Highlights
In its earnings report for 2023, the company reported revenue of £39B. It was around 2% more than the last year. Along with that, we saw a Jump in the operating profit as per the last year if the depreciation is excluded. Moreover, In the net income, we saw an unusual gain of 437% as per the last year.
When we dug deep into the annual report, it was observed that the significant increase in profits was primarily due to the sale of Vantage Towers after it was spun off. While this short-term cash may be a moment to celebrate, there is a bigger fish to fry.
The Abundance of Debt and Crunch of Cash
The company has a considerable debt to pay off, and it is using a lot of funds. However, the debt amount is reducing significantly. The firm is going through a liquidity crunch as it struggles to generate enough cash to pay its dividends. Moreover, the adjusted free cash flow dropped by 11% last year, and the company is expected to experience another decrease in cash flow next year.
Technical Analysis and Prediction of the VOD Share Price
At the press time, VOD share price is trading at £77, The stock has reclaimed its support level of £74.4. The bulls are showing signs of making a high toward the immediate resistance of £81.2. The current price action is happening just above the 50-day Exponential average price of £76. The current trend is uptrend as can be seen in the snapshot above.
The prediction for the VOD share price will be bullish as long as it keeps taking support from its trendline. However, the bulls will have to break the immediate resistance in order to keep the trend bullish.
Conclusion
Vodafone Group Plc (LON: VOD) facilitates telecommunications services. The VOD share price is near its lowest since 1995. In its recent earnings report, the company is looking vulnerable due to a lack of cash and high debt. The short-term trend is bullish and the stock’s price prediction depends on whether it can surpass its immediate resistance level.
Technical Levels
Support: £74 and £70
Resistance: £81, and £89
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/10/18/vod-share-price-stock-struggles-near-its-lowest-point-since-1995/