The final 5 years has been a catastrophe for long-term house owners of Vodafone (LSE:VOD) shares.

The FTSE 100 telecoms large has suffered gross sales weak spot in key European markets, excessive working prices, and hovering debt ranges which have compelled it to chop the dividend.

These pressures have seen Vodafone’s share price topple 57.6% since early 2020 to present ranges of 65.68p. This implies somebody who invested £10,000 within the enterprise 5 years in the past would now have a stake value roughly £4,238.

Nonetheless, CEO Margherita Della Valle has a plan to show issues round. And she or he’s been making strong progress since turning into the telecoms titan’s chief two years in the past.

Whereas they’ve confirmed a catastrophe for a lot of traders prior to now, might now be an excellent time to think about shopping for Vodafone shares?

Daring technique

To this point on Della Valle’s watch, Vodafone has hived off its underperforming Spanish and Italian belongings, the proceeds of which have been used for share buybacks and to pay down debt.

Following final yr’s sale of Vodafone Spain, web debt fell by $1.4bn within the 12 months to September, to $31.8bn. The sale of Vodafone Italy was accomplished shortly afterwards.

The agency’s additionally vowed to double-down on the Vodafone Enterprise arm and is launched into in depth streamlining to chop 11,000 roles from its world workforce (although admittedly, the corporate nonetheless has numerous heavy lifting to do within the last yr of its job-reduction plan).

Lastly, Vodafone UK has efficiently bought its merger with business rival three over the road. Della Valle has mentioned the deal will “full our programme to reshape the group for progress“.

Alternatives and dangers

With Vodafone now a lot nearer to its CEO’s imaginative and prescient, the agency appears to be like to me higher positioned to use its huge market alternatives.

As our lives turn out to be more and more digitalised, demand for telecoms providers is tipped to rise strongly, even in mature markets like Europe. Progress is prone to be even larger in Africa, the place the FTSE agency presents cell and monetary providers.

But whereas it’s in a greater place, Vodafone nonetheless has a variety of challenges to beat. Competitors stays fierce throughout its markets, whereas capital expenditure prices are extreme, impacting the corporate’s path of debt discount.

Vodafone additionally has a job on its palms to show round its ailing German market following current modifications to bundling legal guidelines.

Newest financials confirmed group service revenues up 5.6% between October and December. However in Germany, the corporate’s single largest territory, they reversed 6.4%.

Engaging worth

Following years of stress, Metropolis analysts assume the enterprise is poised for a pointy rebound. They assume it should document one other 13% earnings reversal this monetary yr (to March), earlier than having fun with sturdy progress of 18% in each fiscal 2026 and 2027.

These forecasts go away Vodafone shares buying and selling on a low price-to-earnings (P/E) ratio of 8.5 occasions for the upcoming monetary yr. This may increasingly make it enticing to worth chasers, with its 6.4% ahead dividend yield offering a juicy bonus.

As talked about, Vodafone nonetheless has appreciable issues to beat. However given the cheapness of its shares and massive long-term alternative, I believe the FTSE 100 agency may very well be a high restoration play to think about.