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Helios Towers plc (LON:HTWS) About To Shift From Loss To Profit

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 UK£796m 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. 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?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View 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 expect the company to post a final loss in 2023, before turning a profit of US$13m in 2024. So, the company is predicted to breakeven approximately 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 111% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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, but, keep 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, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Helios Towers, so if you are interested in understanding the company at a deeper level, take a look at Helios Towers' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

  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.