IHS Holding Limited (NYSE:IHS): When Will It Breakeven?
We feel now is a pretty good time to analyse IHS Holding Limited's (NYSE:IHS) business as it appears the company may be on the cusp of a considerable accomplishment. IHS Holding Limited, together with its subsidiaries, owns, operates, and develops shared telecommunications infrastructure in Africa, Latin America, Europe, and the Middle East. The company’s loss has recently broadened since it announced a US$26m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$262m, moving it further away from breakeven. As path to profitability is the topic on IHS Holding's investors mind, we've decided to gauge market sentiment. 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 IHS Holding
According to the 6 industry analysts covering IHS Holding, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$155m in 2023. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving IHS Holding's growth isn’t the focus of this broad overview, however, take into account 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. IHS Holding currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of IHS Holding to cover in one brief article, but the key fundamentals for the company can all be found in one place – IHS Holding's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Valuation: What is IHS Holding 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 IHS Holding 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 IHS Holding’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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