Alpha HPA Limited (ASX:A4N) Is Expected To Breakeven In The Near Future

Alpha HPA Limited (ASX:A4N) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Alpha HPA Limited operates as a specialty metals and technology company. On 30 June 2023, the AU$878m market-cap company posted a loss of AU$16m for its most recent financial year. The most pressing concern for investors is Alpha HPA's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Alpha HPA

Alpha HPA is bordering on breakeven, according to some Australian Chemicals analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$4.0m in 2025. So, the company is predicted to breakeven approximately 2 years 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 116% 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.

Given this is a high-level overview, we won’t go into details of Alpha HPA's upcoming projects, but, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. Alpha HPA currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company 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.

Next Steps:

There are too many aspects of Alpha HPA to cover in one brief article, but the key fundamentals for the company can all be found in one place – Alpha HPA's company page on Simply Wall St. We've also compiled a list of pertinent factors you should further research:

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.