Vodafone’s (LSE: VOD) share price fell 7% on the discharge of its Q3 fiscal 12 months 2025 outcomes.

I believed the numbers unveiled on 4 February had been constructive general. The share price’s mini-rally since then seems to point that others share my view.

That mentioned, the inventory continues to be down 13% from its 17 September one-year traded excessive of 79p. This may occasionally present a cut price shopping for alternative to think about for these whose portfolio the inventory fits.

A more in-depth have a look at the outcomes

A 6.4% year-on-year income decline from its German operations weighed on the quarterly figures.

This was as a consequence of a authorized change forbidding landlords from passing on cable TV charges to tenants. It stays a key threat to the agency, in my opinion.

Nevertheless, the agency’s complete income jumped 5% to €9.8bn. One other constructive for me in Q3 was the sale of Vodafone Italy to Swisscom for €8bn. The proceeds shall be used to cut back web debt and to start a share buyback of up to €2bn. These are inclined to help inventory price beneficial properties.

Additionally promising was the ultimate regulatory approval of the agency’s merger with Three within the UK. It will create the UK’s largest cell phone operator and will deliver price and protection advantages for the brand new entity, I feel.

Are the shares undervalued proper now?

On the price-to-book ratio, Vodafone trades at simply 0.4. That is backside of its peer group, which averages 1.8. These friends comprise Orange at 0.9, BT at 1.2, Telenor at 2.6, and Deutsche Telekom at 2.7.

So, Vodafone appears a serious cut price on this measure.

The identical is true on the price-to-sales ratio too, with the agency at 0.6 in opposition to a peer common of 1.3. And its additionally appears very low cost on its price-to-earnings ratio of 8.9 in comparison with its rivals’ 19.9 common.

To translate all this into share price phrases, I ran a reduced money movement valuation utilizing different analysts’ figures and my very own.

This exhibits Vodafone shares are technically 54% undervalued at 69p. Subsequently, the honest worth for the inventory is £1.50.

Market unpredictability could push the shares decrease or larger than this. Nevertheless, it confirms to me that they give the impression of being a critical cut price proper now.

Will I purchase the inventory?

My age – over 50 – is the important thing issue why I cannot purchase this inventory at its present cut price price. I’m now within the later a part of my funding cycle, which implies two issues to me.

First, I’m targeted on decreasing my working commitments by more and more dwelling off inventory dividends. Analysts undertaking Vodafone’s annual yield shall be round 5.5% in every of the subsequent three years. This compares properly to the FTSE 100 common of three.6%. However it’s a lot lower than the circa 9% common I obtain from my high-yield shares.

Second, the price volatility threat on a sub-£1 share is unacceptable to me. At 69p, every penny of Vodafone’s share price represents 1.4% of the inventory’s worth.

So, it doesn’t seem like an unmissable cut price to me now. Nevertheless, if I had been youthful, it’d seem so.