Vodafone Idea (NSE:IDEA) rises 8.5% this week, taking five-year gains to 89%

While Vodafone Idea Limited (NSE:IDEA) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 16% in the last quarter. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 89%, less than the market return of 220%. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 43% decline over the last twelve months.

Since it's been a strong week for Vodafone Idea shareholders, let's have a look at trend of the longer term fundamentals.

Our free stock report includes 4 warning signs investors should be aware of before investing in Vodafone Idea. Read for free now.

Given that Vodafone Idea didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 5 years Vodafone Idea saw its revenue shrink by 0.6% per year. The stock is only up 14% for each year during the period. That's pretty decent given the top line decline, and lack of profits. We'd keep an eye on changes in the trend - there may be an opportunity if the company returns to growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Vodafone Idea is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Vodafone Idea in this interactive graph of future profit estimates.

A Different Perspective

Vodafone Idea shareholders are down 43% for the year, but the market itself is up 5.2%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 14% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Vodafone Idea is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.