HC2 Holdings Inc (NYSE:HCHC): When Will It Breakeven?

HC2 Holdings Inc's (NYSE:HCHC): HC2 Holdings, Inc. engages in the construction, marine services, energy, telecommunications, insurance, life sciences, and other businesses in the United States, the United Kingdom, and internationally. With the latest financial year loss of -US$49.68m and a trailing-twelve month of -US$70.30m, the US$264.71m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is HCHC’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for HCHC’s growth and when analysts expect the company to become profitable.

According to the industry analysts covering HCHC, breakeven is near. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . Therefore, HCHC is expected to breakeven roughly a couple of months from now! How fast will HCHC have to grow each year in order to reach the breakeven point by ? Working backwards from analyst estimates, it turns out that they expect the company to grow 8.22% year-on-year, on average, which is a somewhat cautious outlook. Should the business grow at a faster rate, it will become profitable at an earlier date than expected.

Given this is a high-level overview, I won’t go into details of HCHC’s upcoming projects, however, take into account that by and large a low or volatile growth rate in the near future is not unusual, especially if the company is currently in an investment period.

One thing I would like to bring into light with HCHC is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in HCHC’s case, it has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of HCHC which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at HCHC, take a look at HCHC’s company page on Simply Wall St. I’ve also compiled a list of key factors you should look at:

1. Valuation: What is HCHC 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 HCHC 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 HC2 Holdings’s board and the CEO’s back ground.
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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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.