Liberty Latin America (NasdaqGS:LILA): Losses Have Grown 10.2% Annually, Market Watches Path to Profitability

Liberty Latin America (LILA) remains unprofitable, with reported losses having expanded over the past five years at an average rate of 10.2% per year. Although revenue is forecast to grow just 2% yearly, slower than the 10.4% growth expected for the broader US market, analysts project a striking forward earnings growth rate of 109.39% per year and believe the company could swing to profitability within the next three years.

See our full analysis for Liberty Latin America.

Now, let’s see how the latest figures compare to the current narratives. Some beliefs may be confirmed, while others might be due for a rethink.

See what the community is saying about Liberty Latin America

Margin Expansion: Turning Negative to Positive?

• Analysts estimate profit margins will rise from -26.6% to 6.1% within three years, a swing that would mark a dramatic shift from persistent losses to steady profitability if realized.
• Consensus narrative highlights that operational efficiencies, cost controls, and modernization are positioned to drive margin expansion and support long-term value. However, ongoing market and regulatory pressures, such as weak net profit margins and volatile B2B revenues, could slow or threaten this turnaround.
  • The forecast depends on management’s ability to maintain discipline on labor costs and to capitalize on network modernization, including fiber and spectrum upgrades.
  • Risks linger as profit growth acceleration has not been evident so far, and further delay in executing key initiatives could pressure future margins.

What if margin gains stall or competitive pressures intensify? See both sides of the margin story in the analysts' consensus case. 📊 Read the full Liberty Latin America Consensus Narrative.

Leverage Concern: $8.2 Billion Debt Load

• Liberty Latin America holds $8.2 billion in consolidated debt and a group leverage ratio of 4.7x, putting it at substantially higher risk than many peers if refinancing becomes costly or capital access tightens.
• Consensus narrative stresses that while liability management and the planned Liberty Puerto Rico separation may ultimately lower leverage and unlock capital flexibility, the capital structure is still weighed down in the near term. The $7.9 billion leverage specific to Puerto Rico is creating heavy interest expenses and refinancing risk.
  • Should the separation or liability exercise face hurdles, high leverage compounds the risk of diminished investment capacity and reduced returns to shareholders.
  • By contrast, if executed well, these moves could position the company for enhanced returns, but investors should be watchful of timing and execution.

Trading at a Steep Discount to Peers

• LILA’s price-to-sales ratio sits at 0.4x, far below both the US telecom industry average of 1.2x and peer average of 1.6x, despite the company’s improving profit outlook.
• Consensus narrative suggests this low multiple reflects ongoing skepticism about the pace of turnaround and the volatility of earnings. However, if margin and revenue improvements materialize as expected, current valuation may understate long-term potential.
  • The current share price is $8.49, which remains well below the single allowed analyst target of $10.75, implying a sizable potential upside if forecasts are met and sentiment shifts.
  • For those optimistic on the company’s execution, the discount could offer compelling value, while risk-averse investors may see it as justified given past losses and leverage concerns.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Liberty Latin America on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Got a different take on these figures? Share your view and shape your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Liberty Latin America.

See What Else Is Out There

Liberty Latin America’s high leverage and persistent debt pressures mean its financial health remains fragile, even as profitability is forecast to improve.

For more resilient investment ideas, check out solid balance sheet and fundamentals stocks screener (1977 results) to find companies built on healthier balance sheets and better positioned for lasting stability.

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.

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