As of May 22, 2025, Vodafone Group PLC's estimated intrinsic value ranges from $40.63 to $301.13 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $51.06 | -34.8% |
| Discounted Cash Flow (5Y) | $55.85 | -28.7% |
| Dividend Discount Model (Multi-Stage) | $40.63 | -48.1% |
| Dividend Discount Model (Stable) | $90.98 | +16.2% |
| Earnings Power Value | $301.13 | +284.6% |
Is Vodafone Group PLC (VOD.L) undervalued or overvalued?
With the current market price at $78.30, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Vodafone Group PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.88 | 1.21 |
| Cost of equity | 9.3% | 13.5% |
| Cost of debt | 4.0% | 9.2% |
| Tax rate | 19.0% | 19.0% |
| Debt/Equity ratio | 2.75 | 2.75 |
| After-tax WACC | 4.8% | 9.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $66 | $64,999M | 77.5% |
| 10-Year Growth | $61 | $63,606M | 60.3% |
| 5-Year EBITDA | $59 | $63,197M | 76.8% |
| 10-Year EBITDA | $66 | $64,950M | 61.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $8,618M |
| Discount Rate (WACC) | 9.1% - 4.8% |
| Enterprise Value | $94,968M - $177,810M |
| Net Debt | $48,745M |
| Equity Value | $46,223M - $129,065M |
| Outstanding Shares | 245M |
| Fair Value | $189 - $528 |
| Selected Fair Value | $301.13 |
| Metric | Value |
|---|---|
| Market Capitalization | $19154M |
| Enterprise Value | $60123M |
| Trailing P/E | 8.60 |
| Forward P/E | 19.21 |
| Trailing EV/EBITDA | 6.20 |
| Current Dividend Yield | 1168.61% |
| Dividend Growth Rate (5Y) | 1.43% |
| Debt-to-Equity Ratio | 2.75 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $15.32 |
| Discounted Cash Flow (5Y) | 25% | $13.96 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.13 |
| Dividend Discount Model (Stable) | 15% | $13.65 |
| Earnings Power Value | 10% | $30.11 |
| Weighted Average | 100% | $81.17 |
Based on our comprehensive valuation analysis, Vodafone Group PLC's weighted average intrinsic value is $81.17, which is approximately 3.7% above the current market price of $78.30.
Key investment considerations:
Given these factors, we believe Vodafone Group PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.