Vodafone Group PLC (VOD Stock) falls after surge on recent earnings report

NASDAQ:VODA has been in recovery mode over the last couple of months as the technology communications giant has climbed back from its low-point during the COVID-19 pandemic. The stock fell 2.33% on Tuesday after an optimistic earnings report on Monday fueled a small and short-lived rally. At its current price levels of $16.35, the stock is firmly back above its 50-day and 200-day moving averages and a rise in service revenue and overall user numbers had CEO Nick Read very upbeat about Vodafone’s recovery into 2021.

Much of Vodafone’s revenues are directly related to their services and while mobile phone usage and sign-ups were up in the first half of its current fiscal year, roaming charges and services declined sharply due to the decrease in global travel. With travel expected to at least rise, if not return to normal, at some point in 2021, Vodafone and its investors are hopeful this will lead to direct growth in its bottom line. Combined with the capital raised from the planned infrastructure IPO of Vodafone’s Vantage Towers which will be listed on the Frankfurt exchange in Germany, and you can see why there is optimism surrounding the U.K. based telecom titan. 

Vodafone stock price 

One positive that came from Vodafone’s earnings call was that the company would continue to provide its high-yielding dividend to its investors. In a time where many companies have either lowered or cancelled their dividends altogether, Vodafone’s confidence in paying theirs out is a nice display of confidence that a return to normal is not far off. Vodafone still has a median price target of $22.20 per share which represents a nice 35% upside from its current price levels.