With the business potentially at an important milestone, we thought we'd take a closer look at Helios Towers plc's (LON:HTWS) future prospects. Helios Towers plc, an independent tower company, builds, acquires, and operates telecommunications towers and related passive infrastructure. The company’s loss has recently broadened since it announced a US$136m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$205m, moving it further away from breakeven. The most pressing concern for investors is Helios Towers' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Helios Towers

Consensus from 6 of the British Telecom analysts is that Helios Towers is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$18m in 2021. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 62% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Helios Towers given that this is a high-level summary, but, bear 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. Note that a higher debt obligation increases the risk around 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 relevant 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.

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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