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When Can We Expect A Profit From Helios Towers plc (LON:HTWS)?

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. The UK£932m market-cap company’s loss lessened since it announced a US$172m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$88m, as it approaches breakeven. 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

Consensus from 6 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 2024, before generating positive profits of US$32m in 2025. Therefore, the company is expected to breakeven roughly 2 years from now. 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 73% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Helios Towers' upcoming projects, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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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, 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 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 key aspects you should look at:

  1. 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.

  2. 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.

  3. 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.