Value
8.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 6.5 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 11.7x
- ▸PEG: 0.09
- ▸Attractively valued
LILA · Why this verdict
Why Liberty Latin America (LILA) 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 score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Despite reporting GAAP losses, the company generates a positive free cash flow margin of 7% of revenue and a free cash flow yield of approximately 21% at current prices — evidence that the business is generating real cash even when accounting results appear distressed. Quality breakdown | Free cash flow margin expands above 10% over the next four quarters, demonstrating that cash generation is improving alongside any stabilization in reported earnings. | →Stable |
| CounterPositive free cash flow alongside a GAAP loss can reflect timing differences or non-cash charges that eventually reverse; with revenue essentially flat year-over-year, the free cash flow margin may compress even without a change in the underlying operating trajectory. | ||
At a forward P/E of 10.7x and a PEG of 0.08, the shares trade at a steep discount to growth expectations, and the near-term price target implies approximately 31% upside with a reward-to-risk ratio of 4.4-to-1 — one of the more attractive entry geometries available if the business can execute. Valuation breakdown | The stock advances at least 20% toward the analyst target over the next 12 months while the PEG ratio remains below 0.5, confirming the fundamental discount is beginning to narrow. | →Stable |
| CounterA low forward multiple and wide ratio can persist indefinitely if the market has correctly concluded that earnings estimates are unreliable — three misses in four quarters with an average surprise of -906% suggest the forecasts themselves may not reflect business reality, making the apparent cheapness a value trap. | ||
A single beat in the most recently reported quarter follows three consecutive prior-period misses, with an average EPS surprise of -906% across the trailing four quarters — a track record that makes forward guidance difficult to rely on as the basis for a conviction-sized position. Earnings | The company delivers at least two consecutive earnings beats over the next three reporting periods, resetting the execution track record and giving the valuation discount a fundamental foundation. | →Stable |
| CounterThe most recent result was a beat, and the extreme magnitude of prior negative surprises may reflect large non-recurring charges rather than ongoing operational failures; if those items have cleared, the prior miss history will become less predictive going forward. | ||
Quality metrics fall just below the minimum investment threshold at 3.9, with no competitive moat and a combined growth-plus-profitability score of 7 — well short of the Rule of 40 threshold — limiting confidence in the durability of any fundamental recovery. Bear case | Quality metrics improve above 5.0 over the next four quarters through a combination of margin expansion and stronger free cash flow conversion, clearing the minimum investment threshold. | →Stable |
| CounterA quality score marginally below the floor is not the same as structural impairment; the combination of positive free cash flow and improving price momentum (a rising on-balance volume and a 200-day moving average that is still trending higher) suggests the business may be closer to a quality inflection than the trailing metrics imply. | ||
Despite reporting GAAP losses, the company generates a positive free cash flow margin of 7% of revenue and a free cash flow yield of approximately 21% at current prices — evidence that the business is generating real cash even when accounting results appear distressed.
→StableQuality breakdown
- Expectation
- Free cash flow margin expands above 10% over the next four quarters, demonstrating that cash generation is improving alongside any stabilization in reported earnings.
CounterPositive free cash flow alongside a GAAP loss can reflect timing differences or non-cash charges that eventually reverse; with revenue essentially flat year-over-year, the free cash flow margin may compress even without a change in the underlying operating trajectory.
At a forward P/E of 10.7x and a PEG of 0.08, the shares trade at a steep discount to growth expectations, and the near-term price target implies approximately 31% upside with a reward-to-risk ratio of 4.4-to-1 — one of the more attractive entry geometries available if the business can execute.
→StableValuation breakdown
- Expectation
- The stock advances at least 20% toward the analyst target over the next 12 months while the PEG ratio remains below 0.5, confirming the fundamental discount is beginning to narrow.
CounterA low forward multiple and wide ratio can persist indefinitely if the market has correctly concluded that earnings estimates are unreliable — three misses in four quarters with an average surprise of -906% suggest the forecasts themselves may not reflect business reality, making the apparent cheapness a value trap.
A single beat in the most recently reported quarter follows three consecutive prior-period misses, with an average EPS surprise of -906% across the trailing four quarters — a track record that makes forward guidance difficult to rely on as the basis for a conviction-sized position.
→StableEarnings
- Expectation
- The company delivers at least two consecutive earnings beats over the next three reporting periods, resetting the execution track record and giving the valuation discount a fundamental foundation.
CounterThe most recent result was a beat, and the extreme magnitude of prior negative surprises may reflect large non-recurring charges rather than ongoing operational failures; if those items have cleared, the prior miss history will become less predictive going forward.
Quality metrics fall just below the minimum investment threshold at 3.9, with no competitive moat and a combined growth-plus-profitability score of 7 — well short of the Rule of 40 threshold — limiting confidence in the durability of any fundamental recovery.
→StableBear case
- Expectation
- Quality metrics improve above 5.0 over the next four quarters through a combination of margin expansion and stronger free cash flow conversion, clearing the minimum investment threshold.
CounterA quality score marginally below the floor is not the same as structural impairment; the combination of positive free cash flow and improving price momentum (a rising on-balance volume and a 200-day moving average that is still trending higher) suggests the business may be closer to a quality inflection than the trailing metrics imply.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Liberty Latin America's deeply discounted valuation — a forward P/E of 10.7x, PEG of 0.08, and a near-term price target implying 31% upside with a 4.4-to-1 reward-to-risk ratio — is offset by quality metrics just below the minimum floor, no competitive moat, and three earnings misses in the four most recently reported quarters; the setup warrants observation rather than commitment until the earnings execution track record improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
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 20.9%)
- ▸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
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.1 |
- ▸Overbought (RSI 75)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 8.7 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 32%
Insider
7.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 9.0 |
| insider conviction | 7.3 |
| holder change | 5.0 |
- ▸Heavy insider buying — $29,783,621 (1.941% of mkt cap)
Peer rank
3.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.6 |
| quality rank | 1.5 |
| growth rank | 3.0 |
Technical
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 1.5 |
| 52w position | 8.8 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 9.1 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 8.5 |
| debt equity | 0.0 |
- ▸High IV: 385%
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 1B/3M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.8<1.5@spot
Warning (0)
none
Reward-to-Risk
0.82
Upside
+12.3%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($1.5B) below institutional reach
SuitabilityAggressive — MCap $1.5B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.3 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:0.8<1.5@spot.
The strongest dimensions are Value at 8.3, Momentum at 7.3, and Insider at 7.1; the weakest are Catalyst at 2.5, Peer rank at 3.0, and Technical at 3.9. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.82 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value And Favorable Geometry
Trip ifUpside to the near-term price target falls below 15% due to price appreciation or downward target revisions, eroding the favorable entry geometry.
- P2Fcf Positive Despite Gaap Losses
Trip ifFree cash flow margin falls below 0% for 2 consecutive quarters, reversing the positive cash-generation profile.
- P3Poor Earnings Execution Track Record
Trip ifAverage quarterly EPS surprise exceeds 10% for 2 consecutive quarters, demonstrating a genuine turn in earnings execution.
- P4Below Floor Quality No Moat
Trip ifQuality score rises above 5.0 for 2 consecutive measurement periods, clearing the minimum investment floor.