Liberty Latin America Ltd. (NASDAQ: LILA)

Sector: Communication Services Industry: Telecom Services CIK: 0001712184
Market Cap 1.56 Bn
P/B 2.48
P/E -2.12
P/S 0.35
ROIC (Qtr) -5.09
Div Yield % 0.00
Rev 1y % (Qtr) 2.14
Total Debt (Qtr) 8.37 Bn
Debt/Equity (Qtr) 13.32
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About

Liberty Latin America Ltd., known by its ticker symbol LILA, is a prominent player in the communications industry, providing a variety of services such as video, broadband internet, telephony, and mobile services to both residential and business customers across Puerto Rico, Panama, Costa Rica, the Caribbean, and other parts of Latin America. The company's primary business activities encompass the provision of fixed-line and mobile telecommunications services, data, and video services, as well as offering enterprise-level connectivity, data center,...

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Investment thesis

Bull case

  • Operating cash flow of 742.60M provides exceptional 15.57x coverage of minority interest expenses 47.70M, showing strong core operations.
  • Operating cash flow of 742.60M provides strong 10.87x coverage of stock compensation 68.30M, indicating sustainable incentive practices.
  • Tangible assets of 7.35B provide exceptional 39.05x coverage of deferred revenue 188.20M, showing strong service capability backing.
  • Operating cash flow of 742.60M provides strong 3.95x coverage of deferred revenue 188.20M, indicating service delivery capability.
  • Cash position of 596.70M provides exceptional 12.51x coverage of minority interest expenses 47.70M, indicating strong liquidity.

Bear case

  • Operating cash flow of 742.60M barely covers its investment activities of (592.80M), with a coverage ratio of -1.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 220.70M provides weak coverage of capital expenditures of 521.90M, with a 0.42 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (68.30M) show weak coverage of depreciation charges of 898.30M, with a -0.08 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 220.70M represents just -4.13x of debt issuance (53.50M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 898.30M relative to operating cash flow of 742.60M, which is 1.21x suggests significant maintenance capital requirements affecting free cash flow.

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Telecom Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMUS T-Mobile US, Inc. 247.58 Bn 22.52 2.80 118.74 Bn
2 T At&T Inc. 210.50 Bn 12.86 1.15 155.04 Bn
3 VZ Verizon Communications Inc 202.20 Bn 11.00 1.54 181.64 Bn
4 CMCSA Comcast Corp 180.83 Bn 58.43 5.08 98.94 Bn
5 VOD Vodafone Group Public Ltd Co 44.88 Bn 3.20 0.62 60.54 Bn
6 CHT Chunghwa Telecom Co Ltd 33.41 Bn 26.87 4.32 1.20 Bn
7 SATS EchoStar CORP 32.60 Bn -2.52 2.15 30.58 Bn
8 CHTR Charter Communications, Inc. /Mo/ 32.03 Bn 6.42 0.58 96.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.77 0.87
EV to Cash from Ops. EV/CFO 12.52 7.73
EV to Debt EV to Debt 1.11 40.31
EV to EBIT EV/EBIT -136.13 2.24
EV to EBITDA EV/EBITDA 9.22 2.53
EV to Free Cash Flow [EV/FCF] EV/FCF 42.13 33.34
EV to Market Cap EV to Market Cap 5.96 1.71
EV to Revenue EV/Rev 2.10 5.12
Price to Book Value [P/B] P/B 2.48 2.16
Price to Earnings [P/E] P/E -2.12 76.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.17
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.79
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 8.04
Interest Coverage Int. cover (Qtr) -0.11 -2.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 3.14 19.27
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 1.38 61.85
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.07
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 40.88 373.65
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 4.02 192.47
EBIT Growth (1y) % EBIT 1y % (Qtr) 57.52 814.56
EBT Growth (1y) % EBT 1y % (Qtr) 9.30 -29.03
EPS Growth (1y) % EPS 1y % (Qtr) -25.94 141.81
FCF Growth (1y) % FCF 1y % (Qtr) 5.40 78.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -0.70 -10.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.37 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.33 0.68
Current Ratio Curr Ratio (Qtr) 1.15 1.56
Debt to Equity Ratio Debt/Equity (Qtr) 13.32 -0.46
Interest Cover Ratio Int Coverage (Qtr) -0.11 -2.53
Times Interest Earned Times Interest Earned (Qtr) -0.11 -2.53
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 18.70 46.49
EBIT Margin % EBIT Margin % (Qtr) -1.54 -51.60
EBT Margin % EBT Margin % (Qtr) -16.08 27.73
Gross Margin % Gross Margin % (Qtr) 77.80 55.49
Net Profit Margin % Net Margin % (Qtr) -16.60 26.33