With the business potentially at an important milestone, we thought we'd take a closer look at Liberty Latin America Ltd.'s (NASDAQ:LILA) future prospects. Liberty Latin America Ltd., together with its subsidiaries, provides fixed, mobile, and subsea telecommunications services. With the latest financial year loss of US$74m and a trailing-twelve-month loss of US$86m, the US$1.9b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on Liberty Latin America's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Liberty Latin America is bordering on breakeven, according to the 6 American Telecom analysts. They expect the company to post a final loss in 2023, before turning a profit of US$77m in 2024. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 85% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Liberty Latin America given that this is a high-level summary, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there's one issue worth mentioning. Liberty Latin America currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn't exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Liberty Latin America to cover in one brief article, but the key fundamentals for the company can all be found in one place – Liberty Latin America's company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

1. Valuation: What is Liberty Latin America worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Liberty Latin America is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Liberty Latin America's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.