Value
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 6.6 |
| Fwd P/E | 7.7 |
| PEG | 10.0 |
- ▸Forward P/E: 16.0x
- ▸PEG: 0.14
- ▸Attractively valued
LILAK · Why this verdict
Why Liberty Latin America (LILAK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Liberty Latin America's Series C shares offer an optically cheap valuation with a forward P/E of 18.9x and PEG of 0.16, but zero earnings beats in the three most recently confirmed reporting periods, quality metrics below the minimum floor, and an unfavorable reward-to-risk ratio at the current price make a cautious posture appropriate until the earnings track record improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
About 6.4% of headroom remains to the near-term resistance target, and the reward-to-risk ratio at current levels is 0.91-to-1 — unfavorable, meaning the downside to support slightly exceeds the remaining upside — leaving no margin of safety for new positions. Price targets | A pullback of at least 8% from current levels, or an upward revision to analyst targets, restores the reward-to-risk ratio above 1.5-to-1, creating a more favorable entry. | →Stable |
| CounterA forward P/E of 18.9x and a PEG of 0.16 suggest the shares are statistically cheap; if earnings execution were to improve, a multiple re-rating could push the stock through resistance and render the current geometry moot quickly. | ||
Despite GAAP losses and a weak earnings track record, the company generates a positive free cash flow margin of 7% and a cash yield of approximately 21% at current prices — confirming the operating business produces real cash even when reported results appear distressed. Quality breakdown | Free cash flow margin expands above 10% over the next four quarters while GAAP losses narrow, demonstrating that the gap between reported earnings and cash generation is closing and the positive cash profile is durable. | →Stable |
| CounterPositive free cash flow alongside flat revenue and a near-zero Rule of 40 score may reflect working-capital timing or one-time cost reductions rather than durable business improvement; if revenue remains essentially flat, free cash flow sustainability is uncertain. | ||
The company recorded zero earnings beats across the three most recently confirmed reporting periods, with an average EPS surprise of -1,598% — a pattern of deeply missing estimates that severely undermines the credibility of forward guidance and any valuation case built on it. Earnings | The company delivers at least two consecutive earnings beats over the next three reporting periods, resetting the execution track record. | →Stable |
| CounterThe magnitude of the negative surprises appears dominated by a single extreme quarter (August 2025) where the miss was exceptionally large; the more recent two misses are smaller in absolute terms, which may suggest the worst-case scenario has already cleared. | ||
Quality metrics fall below the minimum investment threshold at 3.9, with no competitive moat and a combined growth-plus-profitability score of 7 — far short of the Rule of 40 threshold — indicating structural weaknesses that make a durable recovery difficult to underwrite with conviction. Warnings | Quality metrics improve above 5.0 over the next four quarters through margin expansion and stronger cash conversion, clearing the minimum investment threshold. | →Stable |
| CounterThe company generates a positive free cash flow margin of 7% and a cash yield of approximately 21% at current prices — evidence that the underlying business is not burning cash at the operating level even if the headline quality score does not yet reflect this. | ||
About 6.4% of headroom remains to the near-term resistance target, and the reward-to-risk ratio at current levels is 0.91-to-1 — unfavorable, meaning the downside to support slightly exceeds the remaining upside — leaving no margin of safety for new positions.
→StablePrice targets
- Expectation
- A pullback of at least 8% from current levels, or an upward revision to analyst targets, restores the reward-to-risk ratio above 1.5-to-1, creating a more favorable entry.
CounterA forward P/E of 18.9x and a PEG of 0.16 suggest the shares are statistically cheap; if earnings execution were to improve, a multiple re-rating could push the stock through resistance and render the current geometry moot quickly.
Despite GAAP losses and a weak earnings track record, the company generates a positive free cash flow margin of 7% and a cash yield of approximately 21% at current prices — confirming the operating business produces real cash even when reported results appear distressed.
→StableQuality breakdown
- Expectation
- Free cash flow margin expands above 10% over the next four quarters while GAAP losses narrow, demonstrating that the gap between reported earnings and cash generation is closing and the positive cash profile is durable.
CounterPositive free cash flow alongside flat revenue and a near-zero Rule of 40 score may reflect working-capital timing or one-time cost reductions rather than durable business improvement; if revenue remains essentially flat, free cash flow sustainability is uncertain.
The company recorded zero earnings beats across the three most recently confirmed reporting periods, with an average EPS surprise of -1,598% — a pattern of deeply missing estimates that severely undermines the credibility of forward guidance and any valuation case built on it.
→StableEarnings
- Expectation
- The company delivers at least two consecutive earnings beats over the next three reporting periods, resetting the execution track record.
CounterThe magnitude of the negative surprises appears dominated by a single extreme quarter (August 2025) where the miss was exceptionally large; the more recent two misses are smaller in absolute terms, which may suggest the worst-case scenario has already cleared.
Quality metrics fall below the minimum investment threshold at 3.9, with no competitive moat and a combined growth-plus-profitability score of 7 — far short of the Rule of 40 threshold — indicating structural weaknesses that make a durable recovery difficult to underwrite with conviction.
→StableWarnings
- Expectation
- Quality metrics improve above 5.0 over the next four quarters through margin expansion and stronger cash conversion, clearing the minimum investment threshold.
CounterThe company generates a positive free cash flow margin of 7% and a cash yield of approximately 21% at current prices — evidence that the underlying business is not burning cash at the operating level even if the headline quality score does not yet reflect this.
Per-dimension breakdown
Quality
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.8 |
| Gross margin | 10.0 |
| Op margin | 5.6 |
| Net margin | 0.0 |
| Current ratio | 4.3 |
| FCF quality | 5.4 |
| Moat | 4.0 |
| Rule of 40 | 3.0 |
| Piotroski F | 5.6 |
- ▸FCF-positive despite GAAP loss (FCF margin 7%, FCF yield 24.4%)
- ▸No competitive moat
- ▸Rule of 40: 7 (fail)
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.5 |
| EPS growth | 10.0 |
- ▸Declining revenue: -0%
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 9.7 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 75)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 5.9 |
| Price target | 3.2 |
- ▸Light analyst coverage (2.0) — signal dampened
- ▸Below analyst target
Insider
5.0/10data confidence 50%Peer rank
2.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.5 |
| quality rank | 1.1 |
| growth rank | 2.4 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 4.4 |
| volatility | 0.0 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 8.5 |
| debt equity | 0.0 |
- ▸High IV: 101%
Catalyst
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 5.0 |
- ▸Earnings concerns: 0B/3M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.7=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.73
Upside
-25.9%
Downside
15.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $1.3B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.6 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-1.7=NEGATIVE.
The strongest dimensions are Value at 8.6, Momentum at 6.6, and Growth at 6.2; the weakest are Peer rank at 2.8, Catalyst at 3.0, and Technical at 3.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.73 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1About 6.4% of headroom remains to the near-term resistance target, and the reward-to-risk ratio at current levels is 0.91-to-1 — unfavorable, meaning the downside to support slightly exceeds the remaining upside — leaving no margin of safety for new positions.
Trip ifReward-to-risk ratio improves above 1.5-to-1 as the stock pulls back more than 8% from current levels or analyst price targets rise more than 20% above current consensus.
- P2The company recorded zero earnings beats across the three most recently confirmed reporting periods, with an average EPS surprise of -1,598% — a pattern of deeply missing estimates that severely undermines the credibility of forward guidance and any valuation case built on it.
Trip ifAverage quarterly EPS surprise exceeds 10% for 2 consecutive quarters, demonstrating a genuine recovery in earnings execution.
- P3Quality metrics fall below the minimum investment threshold at 3.9, with no competitive moat and a combined growth-plus-profitability score of 7 — far short of the Rule of 40 threshold — indicating structural weaknesses that make a durable recovery difficult to underwrite with conviction.
Trip ifQuality score rises above 5.0 for 2 consecutive measurement periods, clearing the minimum investment floor.
- P4Despite GAAP losses and a weak earnings track record, the company generates a positive free cash flow margin of 7% and a cash yield of approximately 21% at current prices — confirming the operating business produces real cash even when reported results appear distressed.
Trip ifFree cash flow margin falls below 0% for 2 consecutive quarters, reversing the sole near-term positive in the investment case.