Liberty LiLAC Group (LILAK) AI Stock Analysis

• Market Cap: $1.07B
• Dividend Yield: N/A
• Average Volume (3M): 1.49M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.75
• Revenue Growth: -1.56%
• EPS Growth: -10914.21%
• Country: US
• Employees: 10,000
• Sector: Communication Services
• Sector Strength: 85
• Industry: Telecommunications Services
• EPS (TTM): -0.69
• Shares Outstanding: 158,500,000
• 10 Day Avg. Volume: 885,771
• 30 Day Avg. Volume: 1,488,739
• PEG Ratio: 0.11
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.47
• Enterprise Value/Market Cap: 10.21
• Enterprise Value/Revenue: 0.61
• Enterprise Value/Gross Profit: 4.65
• Enterprise Value/Ebitda: 2.59
• 1Y Price Target: $6.30
• Price Target Upside: 17.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 47 Neutral
• Price Target: $5.00 ▼(-6.72%Downside)

Liberty LiLAC Group's stock score reflects its financial struggles, with high debt and declining profitability weighing heavily. Technical indicators are neutral, but valuation concerns are significant due to a negative P/E ratio. The earnings call presents a mixed picture with regional growth offset by challenges in Puerto Rico.

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

Management Optimism

Management appeared overly optimistic regarding their ability to accelerate PR sales and reduce churn, leading to nearly a 40% decline in the stock.

Puerto Rico Challenges

The turnaround in Puerto Rico has been delayed, impacting financial results and forecasts for that region.

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 Business Overview & Revenue Model

Company Description

Liberty 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 Money

Liberty LiLAC Group makes money primarily through subscription fees for its telecommunications services. These include monthly fees for video services, broadband internet, fixed-line telephony, and mobile services. The company also generates revenue from business-to-business services, offering connectivity solutions to enterprises. Additionally, Liberty LiLAC Group may engage in strategic partnerships with content providers and technology companies to enhance its service offerings, thereby contributing to its revenue streams.

Liberty LiLAC Group Financial Statement Overview

Summary

Liberty LiLAC Group's financial health is under pressure with declining revenues, profitability challenges, and high leverage. Despite strong operational cash flow, the company struggles with negative net income and a high debt-to-equity ratio.

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.

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.

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.72B	4.46B	4.51B	4.82B	4.80B	3.76B
	Gross Profit
2.90B	2.96B	3.00B	3.60B	3.61B	2.92B
	EBIT
-1.20M	-48.30M	517.70M	663.80M	681.70M	472.70M
	EBITDA
566.40M	964.60M	1.55B	1.34B	1.18B	620.40M
	Net Income Common Stockholders
-496.10M	-657.00M	-73.60M	-201.90M	-490.10M	-808.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	654.30M	988.60M	781.00M	956.70M	894.20M
	Total Assets
0.00	12.80B	13.59B	13.58B	15.39B	15.23B
	Total Debt
8.26B	8.17B	8.26B	7.96B	7.65B	8.36B
	Net Debt
8.26B	7.51B	7.28B	7.18B	6.69B	7.46B
	Total Liabilities
11.07B	11.17B	11.28B	11.01B	12.47B	11.79B
	Stockholders Equity
1.53B	1.12B	1.76B	1.92B	2.24B	2.71B
Cash Flow		Free Cash Flow
275.30M	215.90M	312.00M	208.70M	279.90M	74.30M
	Operating Cash Flow
840.40M	756.30M	897.00M	868.80M	1.02B	640.10M
	Investing Cash Flow
-477.00M	-688.50M	-615.80M	-1.12B	-1.27B	-2.45B
	Financing Cash Flow
1.81B	-386.40M	-62.40M	-29.20M	426.60M	271.10M

Liberty LiLAC Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.36
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LILAK, the sentiment is Neutral. The current price of 5.36 is above the 20-day moving average (MA) of 5.19, above the 50-day MA of 5.26, and below the 200-day MA of 7.07, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 53.25 is Neutral, neither overbought nor oversold. The STOCH value of 77.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LILAK.

Liberty LiLAC Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VEON	63 Neutral	$2.70B	6.51	42.31%	―	8.27%	―
Sector *	61 Neutral	$14.56B	5.82	-4.02%	6.41%	2.72%	-31.67%
CABO	56 Neutral	$741.80M	59.21	-1.12%	8.95%	-6.30%	-109.90%
LILA	50 Neutral	$1.07B	―	-57.56%	―	-1.56%	-10914.21%
LILAK	47 Neutral	$1.07B	―	-57.56%	―	-1.56%	-10914.21%
TV	45 Neutral	$1.05B	―	-7.49%	4.17%	-17.83%	28.62%
ATUS	41 Neutral	$958.84M	―	21.93%	―	-3.68%	-2563.04%