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Liberty LiLAC (LILAK)
:LILAK
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Liberty LiLAC Group
(NASDAQ:LILAK)
50Neutral
Positive Factors
Cost Efficiency
Management has modified their medium/long target capex from 16% of revenue to 14-16% of revenue, indicating cost efficiency improvements.
Regional Performance
Operations outside of Puerto Rico had a strong performance with notable EBITDA growth in regions like the Caribbean, Panama, and Costa Rica.
Valuation
The current valuation is considered attractive with material upside potential, despite a conservative target price set above the current market level.
Negative Factors
Puerto Rico Performance
The turnaround in Puerto Rico has been delayed, impacting financial results and forecasts for that region.
Stock Decline
Management appeared overly optimistic regarding their ability to accelerate PR sales and reduce churn, leading to nearly a 40% decline in the stock.
Wireless Conversion Issues
The PR wireless conversion issues could persist beyond the fourth quarter, presenting a risk to the company's performance.
Liberty LiLAC Group (LILAK) vs. S&P 500 (SPY)
Market Cap
$1.23B
Dividend YieldN/A
Average Volume (3M)900.63K
Price to Earnings (P/E)―
Beta (1Y)0.69
Revenue Growth-1.31%
EPS Growth-1163.93%
CountryUS
Employees10,000
SectorCommunication Services
Sector Strength70
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-3.34
Shares Outstanding156,500,000
10 Day Avg. Volume807,715
30 Day Avg. Volume900,635
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.30
Price to Cash Flow (P/CF)0.80
P/FCF Ratio1.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.00Price Target Upside57.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Liberty LiLAC Group Business Overview & Revenue Model
Company DescriptionLiberty Latin America Ltd., together with its subsidiaries, provides fixed, mobile, and subsea telecommunications services. The company operates through C&W Caribbean and Networks, C&W Panama, Liberty Puerto Rico, VTR, and Costa Rica segments. It offers communications and entertainment services, including video, broadband internet, fixed-line telephony, and mobile services to residential and business customers; and business products and services that include enterprise-grade connectivity, data center, hosting, and managed solutions, as well as information technology solutions for small and medium enterprises, international companies, and governmental agencies. The company also operates a sub-sea and terrestrial fiber optic cable network that connects approximately 40 markets. It provides its services in approximately 20 countries in Latin America, the Caribbean, Chile, and Costa Rica under the brands of C&W, VTR, Liberty Puerto Rico, Cabletica, BTC, UTS, Flow, and Móvil. The company was incorporated in 2017 and is based in Hamilton, Bermuda.
How the Company Makes MoneyLiberty LiLAC Group makes money primarily through its telecommunications services, which are structured around several key revenue streams. Subscription fees from cable television, internet, and fixed-line telephony services form a significant portion of its income. The company also generates revenue from its mobile services, which include prepaid and postpaid plans that cater to individual and business customers. Additionally, LILAK benefits from strategic partnerships and roaming agreements that enhance its service offerings and reach. Business-to-business services, such as enterprise solutions and managed services, contribute to its earnings by offering tailored communication solutions to corporate clients. The company's revenue model is supported by its extensive infrastructure investments, which allow it to deliver high-quality services and expand its customer base in the competitive Latin American and Caribbean markets.
Liberty LiLAC Group Financial Statement Overview
Summary
Liberty LiLAC Group's financial statements depict a company struggling with profitability and high leverage. Despite strong operational cash flow, revenue is declining, and the company posted negative net income. The high debt-to-equity ratio and negative return on equity highlight financial stability concerns.Income Statement
Liberty LiLAC Group's income statement reveals a mixed performance. Despite a consistent revenue base, with a notable drop from $4,515 million in 2023 to $4,456.9 million in 2024, the company struggles with profitability. The gross profit margin remains relatively strong, but the company posted negative net income in 2024, further exacerbating a declining trend over the years. EBIT margin turned negative in 2024, reflecting operational challenges, while EBITDA margin remains positive, indicating some operational cash generation capability.45
Neutral
Balance Sheet
The balance sheet shows a high debt-to-equity ratio, which increased as stockholder equity fell from $1,763.5 million in 2023 to $1,121 million in 2024, suggesting financial leverage concerns. The equity ratio is low, indicating potential risks in financial stability. The return on equity is negative due to net losses, highlighting profitability issues. The company needs to manage its liabilities more effectively to strengthen its financial position.40
Negative
Cash Flow
Cash flow analysis indicates positive operating cash flows, despite declining from $897 million in 2023 to $756.3 million in 2024. The free cash flow improved significantly in 2024 due to zero capital expenditures, although this may not be sustainable. The company shows a favorable operating cash flow to net income ratio, reflecting solid cash conversion from operations. However, the cash flow situation remains tight given the high debt levels and financing cash outflows.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.46B | 4.51B | 4.82B | 4.80B | 3.76B | Gross Profit |
| 2.96B | 3.00B | 3.60B | 3.61B | 2.92B | EBIT |
| -48.30M | 517.70M | 663.80M | 681.70M | 472.70M | EBITDA |
| 964.60M | 1.55B | 1.34B | 1.18B | 620.40M | Net Income Common Stockholders |
| -657.00M | -73.60M | -201.90M | -490.10M | -808.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 10.40M | 988.60M | 781.00M | 956.70M | 894.20M | Total Assets |
| 12.80B | 13.59B | 13.58B | 15.39B | 15.23B | Total Debt |
| 8.17B | 8.26B | 7.96B | 7.65B | 8.36B | Net Debt |
| 8.16B | 7.28B | 7.18B | 6.69B | 7.46B | Total Liabilities |
| 11.17B | 11.28B | 11.01B | 12.47B | 11.79B | Stockholders Equity |
| 1.12B | 1.76B | 1.92B | 2.24B | 2.71B |
| Cash Flow | Free Cash Flow | |||
| 756.30M | 312.00M | 208.70M | 279.90M | 74.30M | Operating Cash Flow |
| 756.30M | 897.00M | 868.80M | 1.02B | 640.10M | Investing Cash Flow |
| -688.50M | -615.80M | -1.12B | -1.27B | -2.45B | Financing Cash Flow |
| -386.40M | -62.40M | -29.20M | 426.60M | 271.10M |
Liberty LiLAC Group Technical Analysis
Negative
6.34
Price Trends
6.69
Negative
6.73
Negative
8.15
Negative
Market Momentum
-0.11
Positive
37.94
Neutral
5.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LILAK, the sentiment is Negative. The current price of 6.34 is below the 20-day moving average (MA) of 6.61, below the 50-day MA of 6.69, and below the 200-day MA of 8.15, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 37.94 is Neutral, neither overbought nor oversold. The STOCH value of 5.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LILAK.
Liberty LiLAC Group Risk Analysis
Liberty LiLAC Group disclosed 49 risk factors in its most recent earnings report. Liberty LiLAC Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Liberty LiLAC Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $139.52B | 8.91 | 19.24% | 3.38% | 1.78% | 11.62% | |
76 Outperform | $203.00B | 18.96 | 10.54% | 3.90% | -0.08% | -24.48% | |
74 Outperform | $58.39B | 10.54 | 38.11% | ― | 0.88% | 16.44% | |
73 Outperform | $190.95B | 10.94 | 18.27% | 5.92% | 0.61% | 50.39% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
58 Neutral | $4.09B | ― | -20.95% | ― | 3.53% | 3.23% | |
50 Neutral | $1.23B | ― | -45.55% | ― | -1.31% | -1163.93% |
* Communication Services Sector Average
Performance Comparison
LILAK
Liberty LiLAC Group
6.34
-1.06
-14.32%
T
AT&T
28.14
11.50
69.11%
CHTR
Charter Communications
379.27
103.58
37.57%
CMCSA
Comcast
36.61
-3.57
-8.89%
LBTYA
Liberty Global A
11.51
2.82
32.45%
VZ
Verizon
44.74
4.61
11.49%
Liberty LiLAC Group Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -11.33% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong subscriber growth and network investments offset by significant challenges in Puerto Rico and impacts from Hurricane Beryl. While there were notable achievements in certain segments, the difficulties faced in Puerto Rico, including subscriber losses and revenue decline, were substantial.Highlights
Subscriber Growth
Liberty Latin America added nearly 100,000 subscribers in total across fixed and mobile bases, with broadband and postpaid performance particularly robust, adding over 260,000 in 2024 excluding Puerto Rico, which represents a 9% increase.
Financial Performance in C&W Caribbean and Panama
C&W Caribbean saw nearly 200 basis points of margin expansion, driven by cost efficiencies. C&W Panama reported double-digit adjusted OIBDA rebased growth year-on-year driven by cost efficiencies and synergies from the Claro Panama acquisition.
Network Investments
97% of fixed footprint is now gigabit-ready, exceeding the target previously set. Approximately 400,000 homes were passed or upgraded to fiber-to-the-home in 2024.
Capital Structure Improvements
Liberty Latin America successfully refinanced $3.3 billion of C&W debt, with over 75% maturing in 2032 and beyond, aligning with the principle of maintaining a long-dated capital structure.
Lowlights
Challenges in Puerto Rico
Puerto Rico experienced a challenging year with subscriber reductions and a 13% rebased decline in revenue year-over-year. Issues included migration-related disruptions and billing problems.
Hurricane Impact on C&W Caribbean
Hurricane Beryl negatively impacted broadband subscriber growth, with losses of 16,000 in Q3 and a further 11,000 in Q4, primarily in Jamaica.
Decreased Revenue in Liberty Networks
Liberty Networks experienced a 2% rebased decline in revenue, driven by lower wholesale network revenue and the impact of non-cash IRU declines.
Company Guidance
During the fiscal year 2024 investor call, Liberty Latin America reported several key metrics and strategic initiatives. The company added nearly 100,000 subscribers across its fixed and mobile bases, with broadband and postpaid growth particularly strong at over 260,000 adds, excluding Puerto Rico. Adjusted OIBDA reached $1.6 billion, with significant contributions from C&W Caribbean, Costa Rica, and Panama, which experienced double-digit rebased growth. Liberty Latin America invested in network upgrades, passing or upgrading approximately 400,000 homes to fiber-to-the-home, achieving a 97% gigabit-ready fixed footprint. The company also refinanced $3.3 billion of C&W debt, extending maturity to 2032 and beyond. Despite challenges in Puerto Rico, particularly due to disruptions from a customer migration, the company remains focused on operational improvements and aims for an adjusted free cash flow of around $1 billion in the upcoming years. Additionally, Liberty Latin America has set a goal to reduce its capital intensity to 14% of revenue, leveraging completed network upgrades and increased focus on mobile growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.