We feel now is a pretty good time to analyse Hastings Technology Metals Limited's (ASX:HAS) business as it appears the company may be on the cusp of a considerable accomplishment. Hastings Technology Metals Limited, together with its subsidiaries, engages in the exploration and development of rare earth deposits in Australia. The AU$48m market-cap company announced a latest loss of AU$34m on 30 June 2024 for its most recent financial year result. As path to profitability is the topic on Hastings Technology Metals' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See 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 anticipate the company to incur a final loss in 2025, before generating positive profits of AU$34m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 13% year-on-year, on average, which is relatively reasonable. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Hastings Technology Metals given that this is a high-level summary, but, keep in mind that typically 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. So, a double-digit growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Hastings Technology Metals is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Hastings Technology Metals' case is 57%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Hastings Technology Metals 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 Hastings Technology Metals, take a look at Hastings Technology Metals' company page on Simply Wall St. We've also put together a list of important aspects you should look at:

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.

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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.