Almost at 50%! Is it too late to buy Vodafone shares?

Vodafone (LSE:VOD) shares are on a bit of a roll right now, up almost 50% over the past 12 months. That is a significant change in a FTSE 100 the stock, until recently, was stuck in a multi-year downtrend.

Of course, past performance does not guarantee future returns. So, can this meeting go ahead? Or is it too late to jump on the gravy train?

A case of bull

There are various factors at play that have boosted Vodafone’s share price in recent months. However, arguably the biggest driver is the improvement of the group’s performance in its core markets of Germany and the UK.

This category has declined over the years, due to lack of customer satisfaction and strong competition. However, following the group’s recent results, management has finally closed the leak, and its revenue is returning to growth, albeit at a lower rate.

Meanwhile, earlier this year, Vodafone’s recently completed merger with Three UK led to expected sales gains and earnings growth. And with consolidation appearing to be progressing well, UK jobs appear well placed to continue the momentum into 2026.

With the rollout of 5G and fiber optic in both key markets reducing the loss of legacy services, as well as other UK Three synergies, management has projected free cash flow for its 2026 financial year (ending March) to remain stable at around €2.4bn to €2.6bn.

In addition to supporting the 4.1% yield, this continued cash generation allows management to continue issuing the group’s major debt.

With all that in mind, it’s no surprise that Vodafone shares have been on the rise. And if progress continues, 2026 could bring more dividends to shareholders.

What could go wrong?

All investments involve risk. And Vodafone is no different. Although performance in Germany has undoubtedly improved, it is important to note that the competition is still hot.

Deutsche Telekom again Telefonica they are similarly investing heavily in their fiber optic infrastructure. At the same time, while the group’s mobile revenue per user (ARPU) has seen a significant drop in turnover, this appears to be driven mainly by promotional discounts – a strategy that limits revenue growth.

Its operation in the UK also has its fair share of challenges to overcome. The Triple Merger in the UK made Vodafone the largest network operator in the country. But the deal was only approved by regulators after agreeing to potentially capped prices for the next three years.

But even if all goes well and free cash flows remain stable, efforts to reduce debt can ultimately reduce management’s ability to invest in new growth initiatives – potentially creating opportunities for their less financially burdened competitors.

An important point

Although it is still early innings, it seems that Margherita Della Valle has finally achieved the transformation that her predecessors promised and failed to achieve.

There are still many challenges to overcome. But with an encouraging outlook for 2026, Vodafone shares could be worth a deep dive by investors looking to cash in on a potentially lucrative turnaround.