We feel now is a pretty good time to analyse Helios Towers plc's (LON:HTWS) business as it appears the company may be on the cusp of a considerable accomplishment. Helios Towers plc, an independent tower company, builds, acquires, and operates telecommunications towers and related passive infrastructure. On 31 December 2021, the UK£1.5b market-cap company posted a loss of US$156m for its most recent financial year. 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?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Consensus from 5 of the British Telecom analysts is that Helios Towers is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$77m in 2024. The company is therefore projected to breakeven around 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 68% is expected, 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 generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Helios Towers currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
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 pertinent factors you should further research:
- 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.
- 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.
- 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.