Vodafone shares drop below 200-day SMA as GBX 100 support comes into focus
Vodafone continues to expand its enterprise business and digital services, but investors remain focused on the company's ability to restore profitability. Ultimately, financial performance—not new partnerships—will determine the stock's next move.
Vodafone's financial results remain mixed. Over the past 12 months, the company generated €46.9 billion in revenue, but reported a net loss of €476.5 million, leaving its net profit margin at -1.02%. Despite this, the business continues to generate solid free cash flow, while its EV/EBITDA ratio of 4.14 appears attractive relative to many European telecommunications operators.
At the same time, Vodafone still looks relatively undervalued based on its fundamental multiples. A forward P/E of around 10.1 and a price-to-sales (P/S) ratio of 0.67 suggest that the market remains cautious about the company's recovery prospects despite expectations for improving earnings. The stock is also supported by a dividend yield of approximately 4.15%, which remains one of Vodafone's key attractions.
200 SMA breakdown puts GBX 100 in focus
On the daily chart, VOD has fallen below its 200-day simple moving average (SMA), increasing the likelihood of a test of the psychological GBX 100 level.
If this support fails to hold, the probability of a move toward GBX 96.50 will increase significantly in the short term.
To resume its upward trend, Vodafone shares need to reclaim the GBX 104.50 level.
VOD has declined for six consecutive trading sessions, while the RSI (14) is approaching oversold territory. These factors increase the probability of a short-term technical rebound.
If the stock fails to recover above the 200-day SMA today, a rebound is more likely to emerge near GBX 100. However, traders should remain cautious and pay close attention to risk management.
A decisive break below GBX 100 could open the way toward the next support level at GBX 96.50.
Vodafone still needs to prove its turnaround
Despite its attractive valuation, Vodafone still needs to demonstrate that its recovery is sustainable. Low valuation multiples alone are no longer enough to drive the stock higher.
Over the coming quarters, investors will closely monitor earnings growth, free cash flow generation, and the effectiveness of the company's business optimization program. These metrics will ultimately determine whether Vodafone can emerge from its prolonged period of stagnation.
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