Analysts Are Optimistic We'll See A Profit From Helios Towers plc (LON:HTWS)

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, builds, acquires, and operates telecommunications towers and related passive infrastructure. With the latest financial year loss of US$136m and a trailing-twelve-month loss of US$205m, the UK£1.6b market-cap company amplified its loss by moving further away from its breakeven target. 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.

See our latest analysis for Helios Towers

According to the 7 industry analysts covering Helios Towers, the consensus is that breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$18m in 2021. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 62%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Helios Towers' growth isn’t the focus of this broad overview, but, keep 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 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. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Helios Towers which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Helios Towers, take a look at Helios Towers' company page on Simply Wall St. We've also put together a list of important factors you should further examine:

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.

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This article by Simply Wall St is general in nature. 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.
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