Last Update 12 Dec 25

LILA: Sustained 7% EBITDA Performance Will Drive Continued Share Rebound

Analysts have raised their price target on Liberty Latin America to $13 from $12, citing confidence that the company's recent 7 percent Q3 rebased EBITDA growth reflects sustainably improving performance.

Analyst Commentary

Analyst feedback on the updated price target highlights both growing confidence in Liberty Latin America's operational trajectory and several areas that still warrant caution from an execution and valuation standpoint.

Bullish Takeaways

Bullish analysts point to the 7 percent Q3 rebased EBITDA growth as evidence that recent improvements are not one-off. This is seen as supporting a higher valuation multiple on more predictable cash flows.
The upward revision in the price target is framed as a recognition that the stock's rebound potential remains significant, as management continues to deliver on cost discipline and margin expansion.
Stronger underlying profitability trends are seen as enhancing the company's financial flexibility, which could accelerate strategic investments and inorganic growth opportunities in core markets.
Improved earnings visibility is viewed as reducing downside risk, with analysts suggesting the risk reward skew is shifting favorably as execution metrics steadily meet or exceed prior expectations.

Bearish Takeaways

Bearish analysts caution that despite the better than expected performance, the upgraded price target still embeds assumptions of sustained high single digit EBITDA growth that may be vulnerable to macro or competitive pressures in Latin American markets.
Some remain concerned that the rebound thesis is heavily dependent on continued operational execution, leaving limited margin for error if integration initiatives or network investments lag.
There is also wariness that a stronger growth profile could attract intensified competitive responses, which may cap pricing power and limit upside to revenue expansion over the medium term.
Valuation skeptics argue that while the stock appears more reasonably priced relative to its improved fundamentals, a full rerating will require multiple additional quarters of consistent delivery to build broader investor conviction.

What's in the News

Completed a major share repurchase under the May 8, 2023 buyback program, buying back 20,045,325 shares, or 9.74 percent of outstanding shares, for a total of $147.66 million, including 280,000 shares repurchased in Q3 2025 for $2.31 million (company buyback update).
Maintained flexibility under a newer buyback program announced on May 7, 2024. No shares were repurchased in the July 1 to September 30, 2025 period, signaling disciplined capital deployment despite authorization (company buyback update).
Partnered with Starlink Direct to Cell to restore critical mobile connectivity in Jamaica after Hurricane Melissa, enabling FLOW Jamaica customers to access data, SMS, and app based messaging via Starlink's satellite network when terrestrial infrastructure is down, in what is described as the first collaboration of its kind in the Caribbean (company client announcement).

Valuation Changes

Fair Value: Unchanged at approximately $11.97 per share, indicating no adjustment to the intrinsic value estimate despite operational updates.
Discount Rate: Held steady at 12.5 percent, reflecting an unchanged view of the company’s risk profile and required return.
Revenue Growth: Lowered from about 2.6 percent to roughly 1.8 percent, signaling a modestly more conservative outlook on top line expansion.
Net Profit Margin: Increased slightly from around 7.08 percent to about 7.25 percent, incorporating expectations for incremental profitability improvements.
Future P/E: Stable at roughly 10.6x, suggesting the valuation multiple applied to forward earnings remains consistent with prior assumptions.

Expansion in broadband, mobile, and B2B services is boosting revenue growth, supported by urbanization, increased device use, and digital infrastructure projects.
Operational efficiencies, modernization, and strategic restructuring are improving margins, cash flow, capital flexibility, and long-term shareholder value.
Heavy debt, volatile revenue streams, and persistent regulatory and market pressures threaten long-term earnings growth, investment capacity, and shareholder value across core markets.

Catalysts

About Liberty Latin America

Provides fixed, mobile, and subsea telecommunications services in Puerto Rico, Panama, Costa Rica, Jamaica, Latin America and the Caribbean, the Bahamas, Trinidad and Tobago, Barbados, Curacao, Chile, and internationally.What are the underlying business or industry changes driving this perspective?

Sustained growth in high-speed broadband and postpaid mobile subscribers across multiple markets, driven by rising demand for digital connectivity and mobile device adoption in Latin America, is expected to power top-line revenue expansion and higher ARPU.
Increasing urbanization and socioeconomic development, coupled with ongoing government digitization initiatives (e.g., Panama's nationwide public school contract), are likely to fuel advanced communications infrastructure and B2B revenue growth, enhancing both net margins and earnings quality.
Successful execution of network modernization projects (fiber rollouts, upgrades to DOCSIS 3.1, new spectrum deployments) and fixed-mobile convergence strategies are enabling higher-margin service bundles, which support revenue growth and increased customer retention.
Ongoing operational efficiency initiatives-such as labor cost reductions, AI-driven process optimization, and disciplined capital intensity management-are expected to drive adjusted OIBDA margin expansion and improve free cash flow generation.
The planned separation of Liberty Puerto Rico and liability management efforts are poised to lower consolidated leverage, unlock capital structure flexibility, and potentially enable enhanced capital returns (e.g., share repurchases, dividends) post-separation, which should have a positive impact on long-term earnings and shareholder value.

Liberty Latin America Earnings and Revenue Growth

Liberty Latin America Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Liberty Latin America's revenue will grow by 2.2% annually over the next 3 years.
Analysts assume that profit margins will increase from -26.6% today to 6.1% in 3 years time.
Analysts expect earnings to reach $289.3 million (and earnings per share of $0.79) by about September 2028, up from $-1.2 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.6x on those 2028 earnings, up from -1.3x today. This future PE is lower than the current PE for the US Telecom industry at 15.4x.
Analysts expect the number of shares outstanding to grow by 1.73% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.22%, as per the Simply Wall St company report.

Liberty Latin America Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Liberty Puerto Rico's highly leveraged and unsustainable capital structure (7.9x leverage) and pending liability management exercise present material refinancing risk and ongoing high interest expense, which may pressure net earnings and reduce overall shareholder value, especially if separation efforts are delayed or unsuccessful.
Persistent declines or stagnation in fixed broadband ARPU and subscriber bases across several markets (notably in Puerto Rico and Costa Rica), due to intense competition and external factors like ACP discontinuation, risk undermining long-term revenue and ARPU growth.
B2B segment revenues, particularly those dependent on large, nonrecurring government contracts, are subject to high lumpiness and delayed revenue recognition, which introduces volatility into cash flows and impedes the predictability of long-term earnings and margins.
Macroeconomic and regulatory volatility across Latin America-including currency depreciation, bureaucratic delays in government payments, and risks associated with changing tax, pricing, or network regulations-could erode revenue in USD terms, impact free cash flow, and compress net margins for Liberty Latin America.
High group-level debt (~$8.2 billion consolidated) and leverage (4.7x net) limit strategic flexibility, constrain investment in next-gen technologies (like fiber and 5G), and amplify refinancing risks, which may negatively impact long-term free cash flow and capital returns even after the planned Puerto Rico separation.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $10.633 for Liberty Latin America based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $13.9, and the most bearish reporting a price target of just $6.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.7 billion, earnings will come to $289.3 million, and it would be trading on a PE ratio of 10.6x, assuming you use a discount rate of 11.2%.
Given the current share price of $7.89, the analyst price target of $10.63 is 25.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Latin America Broadband And Mobile Expansion Will Unlock Future Connectivity