Yahoo Finance Liberty Latin America Ltd. (NASDAQ:LILA): When Will It Breakeven?
Liberty Latin America Ltd. (NASDAQ:LILA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Liberty Latin America Ltd., together with its subsidiaries, provides fixed, mobile, and subsea telecommunications services. On 31 December 2023, the US$1.5b market-cap company posted a loss of US$74m for its most recent financial year. The most pressing concern for investors is Liberty Latin America's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Liberty Latin America
According to the 5 industry analysts covering Liberty Latin America, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$104m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Liberty Latin America's upcoming projects, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Liberty Latin America 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 in investing in the loss-making company.
Next Steps:
There are key fundamentals of Liberty Latin America 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 Liberty Latin America, take a look at Liberty Latin America's company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Liberty Latin America 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 Liberty Latin America 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 Liberty Latin America’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.
