Stocks typically experience short-term volatility after full-year results are released. Depending on whether the numbers are good or not, along with the outlook for the coming year, a stock’s trajectory can change quite rapidly. Vodafone (LSE:VOD) has been performing well. But if someone bought Vodafone shares just after the 2025 annual results, how would things look now?
A clear outperformer
The last annual results came out in late May 2025. The stock surged on the day from 72.46p to close at 77.4p, a 6.8% gain. From there, it has continued to climb, with it now at 115p. This represents a 48.6% move in under a year, meaning the £2k would be worth £2,972 at the moment. Of course, the value of the stock fluctuates every day. So any profit or loss will only be realised when it’s sold, and the proceeds are in a bank account.
Yet the jump from the last earnings shows Vodafone’s progress, which has outstripped peers and the broader market. For example, over the same period, the FTSE 100 is up 19%. Don’t get me wrong, that’s still a strong gain. But it’s nowhere near Vodafone’s performance.
Building momentum
The results from a year ago provided a catalyst for the stock to rally. The company confirmed it had completed a major phase of its restructuring and was entering a period of sustainable free cash flow growth.
Further, the UK merger with Three was all but completed by last May, and is genuinely a big deal. It creates the UK’s largest mobile operator and opens the door to meaningful cost synergies (around £700m annually).
With a continued push to sell unprofitable operations around the world and to focus on places where growth was evident, Vodafone has pushed ahead. Investors have cheered this on in the past year, but I don’t think the story is over yet.
The future
The reshaped Vodafone has a lot going for it. For a start, it’s more focused. As the firm is more cash generative, it can afford to invest in growth markets. Two recent examples of this include Kenya and Egypt. Even here in the UK, the merger should deliver both cost savings and revenue opportunities.
One concern I do have is underperformance in Germany. It’s still the group’s largest market, and while there are signs of stabilisation, performance has been patchy. This needs to improve or it could really weigh on future financial performance.
On balance, I believe the run-up in the share price over the past year isn’t over yet. Companies like Vodafone take years to fully transform and realise both cost benefits and new revenue opportunities. Therefore, I think earnings could keep growing for 2026 and beyond. Investors who agree with me could consider buying the stock.
