Alpha HPA Limited's (ASX:A4N) Profit Outlook

We feel now is a pretty good time to analyse Alpha HPA Limited's (ASX:A4N) business as it appears the company may be on the cusp of a considerable accomplishment. Alpha HPA Limited operates as a specialty metals and technology company. The AU$971m market-cap company posted a loss in its most recent financial year of AU$16m and a latest trailing-twelve-month loss of AU$20m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on Alpha HPA'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.

View our latest analysis for Alpha HPA

Expectations from some of the Australian Chemicals analysts is that Alpha HPA is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$59m in 2026. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 95% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Alpha HPA's growth isn’t the focus of this broad overview, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 3.4% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Alpha HPA, so if you are interested in understanding the company at a deeper level, take a look at Alpha HPA's company page on Simply Wall St. We've also put together a list of important aspects you should further examine:

1. Valuation: What is Alpha HPA 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 Alpha HPA 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 Alpha HPA’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.

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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.