Hastings Technology Metals Limited’s (ASX:HAS): Hastings Technology Metals Limited engages in the exploration and development of natural resource properties in Australia. The AU$132m market-cap company announced a latest loss of -AU$2.9m on 30 June 2018 for its most recent financial year result. As path to profitability is the topic on HAS’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for HAS.
According to the industry analysts covering HAS, breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of AU$57m in 2021. HAS is therefore projected to breakeven around 3 years from now. What rate will HAS have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 55%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of HAS’s upcoming projects, however, keep in mind that by and large a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that HAS has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which usually has a high level of debt relative to its equity. HAS currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on HAS, so if you are interested in understanding the company at a deeper level, take a look at HAS’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should look at:
- Valuation: What is HAS 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 HAS 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 Hastings Technology Metals’s board and the CEO’s back ground.
- 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.