When Will Hastings Technology Metals Limited (ASX:HAS) Turn A Profit?

Hastings Technology Metals Limited (ASX:HAS) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hastings Technology Metals Limited engages in the exploration and development of rare earth deposits in Australia. With the latest financial year loss of AU$11m and a trailing-twelve-month loss of AU$15m, the AU$51m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Hastings Technology Metals' 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.

Check out our latest analysis for Hastings Technology Metals

Consensus from 2 of the Australian Metals and Mining analysts is that Hastings Technology Metals is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of AU$37m in 2026. The company is therefore projected to breakeven around 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 7.7% is expected, which is a somewhat cautious outlook. If this rate turns out to be too low, the company may become profitable faster than analysts expect.

We're not going to go through company-specific developments for Hastings Technology Metals given that this is a high-level summary, however, bear in mind that generally 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 that a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Hastings Technology Metals currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Hastings Technology Metals' case is 51%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

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

1. Historical Track Record: What has Hastings Technology Metals' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
2. 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' 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com