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, acquires, builds, and operates telecommunications towers and passive infrastructure. The company’s loss has recently broadened since it announced a US$156m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$229m, moving it further away from 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.
Helios Towers is bordering on breakeven, according to the 7 British Telecom analysts. They expect the company to post a final loss in 2023, before turning a profit of US$22m in 2024. Therefore, the company is expected 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 54%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Helios Towers given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
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.
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 put together a list of pertinent factors 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.
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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