Visually, the Vodafone (LSE: VOD) share price looks like it could be one of the best buys on the FTSE 100. But is that really the case?

It’s safe to say the last five years have been extremely disappointing for the telecommunications giant. Its shareholders won’t be happy with its performance. During that time, the stock’s lost 53.4% of its value.

But now sitting at 75.6p, could we see the stock perform a turnaround in the times ahead?

Is it really cheap?

It’s difficult to say whether the stock really is cheap. The stock market’s unpredictable. However, one way to assess Vodafone is by looking at its valuation.

The stock trades on a price-to-earnings (P/E) ratio of 20.9. In my eyes, that looks expensive. By comparison, the FTSE 100 average is 11. That said, looking ahead paints a better picture. Vodafone’s forward P/E’s 9.9.

While that looks like much better value when compared to the FTSE 100 average, stacking Vodafone up against its peers still highlights the stock may be expensive. Take BT as an example. It currently trades on a P/E of 17.3, considerably cheaper than Vodafone. What’s more, its forward P/E is a mere 5.7.

A value trap?

Based on the above, I’m conscious that even after losing over 50% of its value in five years, Vodafone may still be pricey. Could it be the stock’s a classic value trap?

I think there’s potential that it is. Its long-term performance has been woeful. And even in the last 12 months when the FTSE 100 has rallied 8.6%, the telecoms stalwart’s stock’s down 5.6%.

I could be wrong

Then again, there’s the chance I could be wrong. And under the leadership of Margherita Della Valle, the firm certainly has turnaround potential.

Since taking over in January 2023, Della Valle’s been on a streamlining mission. As part of this, the firm’s offloaded businesses in unprofitable regions such as Spain and Italy. For these, it raised €5bn and €8bn respectively. Alongside that, it’s turned its focus to regions with greater growth potential, such as Africa.

In an attempt to strengthen its balance sheet, the business also took the decision to slash its dividend in half from next year. Prior to this move, Vodafone had one of the largest payouts on the FTSE 100. But while the decision to cut its dividend will see its payout fall significantly, the business will save €1bn.

I think that’s a sensible move. Yet while it will help shore up the firm’s books, I still see other issues. For example, it has a €33.2bn debt pile on its balance sheet. Moving forward, I’m concerned this could stunt the firm’s growth.

My move

While Vodafone may look like a steal on paper, it’s a stock I’ll be avoiding today. Some may argue the business has turnaround potential. However, I’m worried it could be a value trap. I think there are plenty of other Footsie stocks that present better value.