Hastings Technology Metals Limited's (ASX:HAS): Hastings Technology Metals Limited engages in the exploration and development of natural resource properties in Australia. The AU$164m market-cap company’s loss lessens since it announced a -AU$5.2m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -AU$5.2m, as it approaches breakeven. Many investors are wondering the rate at which HAS will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for HAS’s growth and when analysts expect the company to become profitable.
HAS is bordering on breakeven, according to the 2 Metals and Mining analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$16m in 2022. So, HAS is predicted to breakeven approximately 3 years from today. What rate will HAS have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 59%, which is extremely buoyant. If this rate turns out to be too aggressive, HAS may become profitable much later than analysts predict.
Underlying developments driving HAS’s growth isn’t the focus of this broad overview, but, bear in mind that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that HAS has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high debt relative to its equity. This means that HAS has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
There are too many aspects of HAS to cover in one brief article, but the key fundamentals for the company can all be found in one place – HAS’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:
- Valuation: What is HAS 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 HAS 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 Hastings Technology Metals’s board and the CEO’s back ground.
- 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.
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