Vodafone Group Operating Margin vs. Return On Equity

VOD Stock  USD 8.76  0.07  0.79%   
Considering Vodafone Group's profitability and operating efficiency indicators, Vodafone Group's profitability may be sliding down. It has an above-average probability of reporting lower numbers next quarter. Profitability indicators assess Vodafone Group's ability to earn profits and add value for shareholders.

Vodafone Group Operating Profit Margin

0.13

At present, Vodafone Group's Days Of Sales Outstanding is projected to decrease significantly based on the last few years of reporting. At present, Vodafone Group's Operating Income is projected to decrease significantly based on the last few years of reporting. The current year's Income Before Tax is expected to grow to about 1.7 B, whereas Income Tax Expense is forecasted to decline to about 47.5 M.
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.450.3339
Significantly Up
Slightly volatile
For Vodafone Group profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Vodafone Group to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Vodafone Group PLC utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Vodafone Group's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Vodafone Group PLC over time as well as its relative position and ranking within its peers.
  
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Is Wireless Telecommunication Services space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Vodafone Group. If investors know Vodafone will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Vodafone Group listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
8.21
Dividend Share
0.068
Earnings Share
0.91
Revenue Per Share
6.88
Quarterly Revenue Growth
0.016
The market value of Vodafone Group PLC is measured differently than its book value, which is the value of Vodafone that is recorded on the company's balance sheet. Investors also form their own opinion of Vodafone Group's value that differs from its market value or its book value, called intrinsic value, which is Vodafone Group's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Vodafone Group's market value can be influenced by many factors that don't directly affect Vodafone Group's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Vodafone Group's value and its price as these two are different measures arrived at by different means. Investors typically determine if Vodafone Group is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Vodafone Group's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Vodafone Group PLC Return On Equity vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Vodafone Group's current stock value. Our valuation model uses many indicators to compare Vodafone Group value to that of its competitors to determine the firm's financial worth.
Vodafone Group PLC is rated below average in operating margin category among its peers. It is rated below average in return on equity category among its peers reporting about  0.33  of Return On Equity per Operating Margin. The ratio of Operating Margin to Return On Equity for Vodafone Group PLC is roughly  3.00 . At present, Vodafone Group's Operating Profit Margin is projected to increase slightly based on the last few years of reporting. Comparative valuation analysis is a catch-all technique that is used if you cannot value Vodafone Group by discounting back its dividends or cash flows. It compares the stock's price multiples to nearest competition to determine if the stock is relatively undervalued or overvalued.

Vodafone Return On Equity vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Vodafone Group

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.13 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.

Vodafone Group

Return On Equity

 = 

Net Income

Total Equity

 = 
0.0441
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.

Vodafone Return On Equity Comparison

Vodafone Group is currently under evaluation in return on equity category among its peers.

Vodafone Group Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Vodafone Group, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Vodafone Group will eventually generate negative long term returns. The profitability progress is the general direction of Vodafone Group's change in net profit over the period of time. It can combine multiple indicators of Vodafone Group, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income28.2 B32.9 B
Operating Income3.7 B3.8 B
Income Before Tax1.6 B1.7 B
Total Other Income Expense Net-2 B-1.9 B
Net Income1.6 B2.6 B
Income Tax Expense50 M47.5 M
Net Income Applicable To Common Shares10.7 B11.2 B
Net Income From Continuing Ops1.6 B1.6 B
Interest Income395 M411 M
Net Interest Income-2.4 B-2.5 B
Change To Netincome-9.3 B-8.8 B
Net Income Per Share 0.04  0.05 
Income Quality 14.52  7.50 
Net Income Per E B T 0.70  0.86 

Vodafone Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Vodafone Group. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Vodafone Group position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Vodafone Group's important profitability drivers and their relationship over time.

Use Vodafone Group in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Vodafone Group position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vodafone Group will appreciate offsetting losses from the drop in the long position's value.

Vodafone Group Pair Trading

Vodafone Group PLC Pair Trading Analysis

The ability to find closely correlated positions to Vodafone Group could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Vodafone Group when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Vodafone Group - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Vodafone Group PLC to buy it.
The correlation of Vodafone Group is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Vodafone Group moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Vodafone Group PLC moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Vodafone Group can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Vodafone Group position

In addition to having Vodafone Group in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Large Value Funds
Large Value Funds Theme
Funds or Etfs that invest in the undervalued stocks of large-sized companies. The Large Value Funds theme has 46 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Large Value Funds Theme or any other thematic opportunities.
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When determining whether Vodafone Group PLC is a strong investment it is important to analyze Vodafone Group's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Vodafone Group's future performance. For an informed investment choice regarding Vodafone Stock, refer to the following important reports:
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You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
To fully project Vodafone Group's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Vodafone Group PLC at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Vodafone Group's income statement, its balance sheet, and the statement of cash flows.
Potential Vodafone Group investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Vodafone Group investors may work on each financial statement separately, they are all related. The changes in Vodafone Group's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Vodafone Group's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.