Yahoo Finance Analysts Expect Breakeven For Helios Towers plc (LON:HTWS)
Helios Towers plc (LON:HTWS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Helios Towers plc, an independent tower company, builds, acquires, and operates telecommunications towers and related passive infrastructure. The UK£1.5b market-cap company posted a loss in its most recent financial year of US$135.9m and a latest trailing-twelve-month loss of US$204.7m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Helios Towers will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Helios Towers
Consensus from 5 of the British Telecom analysts is that Helios Towers is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$13m in 2021. The company is therefore projected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 101%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Helios Towers' upcoming projects, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Helios Towers is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Helios Towers, so if you are interested in understanding the company at a deeper level, take a look at Helios Towers' company page on Simply Wall St. We've also compiled a list of relevant aspects you should further examine:
Valuation: What is Helios Towers worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Helios Towers is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Helios Towers’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. 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.
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