Airtel Africa‘s (LSE:AAF) been the top-performing FTSE 100 inventory within the final month. The share price is up 26.85% – sufficient to generate a £268 return on a £1,000 funding.

There are additionally a whole lot of potential progress alternatives forward of the corporate over the long run. So ought to traders assume the inventory can hold climbing for a very long time to return?

Alternatives

Airtel Africa’s success hasn’t simply are available in 2025. Over the past 5 years, the share price has virtually doubled as the corporate has elevated its subscribed base by just below 50%. 

The corporate gives cell phone, knowledge, and cell cash providers in 14 African nations. And regardless of its spectacular progress since 2020, there’s nonetheless an enormous market accessible.

The whole inhabitants of the nations Airtel Africa operates in is 500m. And cell penetration’s under 50% in a few of these nations, whereas lower than 30% of individuals have a checking account.

These are nations the place the median age is round 20 and the inhabitants”s rising. So it’s straightforward to see why there may nonetheless be an extended method to go for the corporate and the inventory.

Forex

There are nevertheless, some huge dangers that include investing in such a enterprise. The obvious is the forex danger. 

Over the past 5 years, the worth of the Nigerian naira in opposition to the British pound has fallen by 75%. And if this continues, it may considerably weigh on income.

With different currencies – just like the US greenback – traders would possibly assume the chance of fluctuating change charges is sufficiently small to disregard. However I don’t assume that’s really easy to do on this case. 

Forecasting change charges isn’t straightforward. However given the potential significance, I believe the continued decline of the Nigerian naira is one thing Airtel Africa shareholders need to plan for. 

Capital depth

The opposite huge danger with Airtel Africa is that offering cell providers requires a whole lot of infrastructure, resembling cell towers and fibre optic networks. And that is costly to put in and preserve. 

Usually, traders have to be cautious of companies which have excessive ongoing capital necessities. This could minimize into the money that’s accessible for issues like dividends and share buybacks. 

Firms like BT within the UK and Verizon within the US typically haven’t been nice shares to personal. And their fixed want to keep up their infrastructure has been a key a part of this. Arguably nevertheless, it’s because they haven’t had similar progress prospects as Airtel Africa. And a weaker Nigerian naira really has the impact of creating ongoing bills much less onerous.

Is there extra to return?

With an enormous market nonetheless to handle, Airtel Africa arguably has higher progress alternatives than some other FTSE 100 firm. What meaning by way of funding returns nevertheless is much less clear. 

I wouldn’t be shocked to see the inventory proceed to climb. However there’s an excessive amount of uncertainty for me to wish to purchase, particularly once I assume there are extra apparent alternatives elsewhere.