Yahoo Finance Loss-Making Helios Towers plc (LON:HTWS) Expected To Breakeven In The Medium-Term
We feel now is a pretty good time to analyse Helios Towers plc's (LON:HTWS) business as it appears the company may be on the cusp of a considerable accomplishment. Helios Towers plc, an independent tower company, acquires, builds, and operates telecommunications towers and passive infrastructure. With the latest financial year loss of US$156m and a trailing-twelve-month loss of US$229m, the UK£1.3b market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Helios Towers' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Helios Towers
Helios Towers is bordering on breakeven, according to the 5 British Telecom analysts. They expect the company to post a final loss in 2023, before turning a profit of US$47m in 2024. So, the company is predicted to breakeven approximately 2 years from now. 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 63%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Helios Towers given that this is a high-level summary, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Helios Towers currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is 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:
There are too many aspects of Helios Towers to cover in one brief article, but the key fundamentals for the company can all be found in one place – Helios Towers' company page on Simply Wall St. We've also compiled a list of important factors you should look at:
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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