Analysts Expect Liberty Latin America Ltd. (NASDAQ:LILA) To Breakeven Soon

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. The US$1.2b market-cap company announced a latest loss of US$74m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Liberty Latin America will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Liberty Latin America

Liberty Latin America is bordering on breakeven, according to the 4 American Telecom analysts. They expect the company to post a final loss in 2023, before turning a profit of US$44m in 2024. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 125% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Liberty Latin America's growth isn’t the focus of this broad overview, however, bear in mind that typically a high 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 Liberty Latin America is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Liberty Latin America to cover in one brief article, but the key fundamentals for the company can all be found in one place – Liberty Latin America's company page on Simply Wall St. We've also compiled a list of relevant factors you should further examine:

1. 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.
2. 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.
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.