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 engages in the exploration and development of rare earth deposits in Australia. The AU$45m market-cap company announced a latest loss of AU$34m on 30 June 2024 for its most recent financial year result. The most pressing concern for investors is Hastings Technology Metals' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Hastings Technology Metals

Hastings Technology Metals is bordering on breakeven, according to the 2 Australian Metals and Mining analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of AU$34m in 2026. 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 13% is expected, which seems relatively fair. 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, take into account that by and large 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. This means a double-digit growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one issue worth mentioning. Hastings Technology Metals currently has a 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:

This article is not intended to be a comprehensive analysis on Hastings Technology Metals, so if you are interested in understanding the company at a deeper level, take a look at Hastings Technology Metals' company page on Simply Wall St. We've also compiled a list of key factors 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.