Liberty Latin America (NasdaqGS:LILA): Is the Recent Pullback Creating a Valuation Opportunity?

Liberty Latin America (LILA) has quietly slipped about 5% over the past week and 3% over the past month, even though the stock is still up roughly 25% year to date.

See our latest analysis for Liberty Latin America.

That recent pullback in the share price, now around $7.98, comes after a strong year to date share price return of about 25%. However, the five year total shareholder return is still negative, suggesting momentum is improving from a low base but not yet fully convincing over the long term.

If Liberty Latin America has you watching regional telecoms more closely, it could also be a good moment to broaden your search and explore fast growing stocks with high insider ownership.

With earnings still in the red but analysts seeing nearly 50% upside to their price targets, the real question now is whether Liberty Latin America is trading below its true value or if the market is already pricing in that future growth.

Most Popular Narrative: 33.3% Undervalued

With Liberty Latin America last closing at $7.98 versus a narrative fair value near $11.97, the current gap hinges on ambitious profit and margin recovery.

Analysts assume that profit margins will increase from -26.6% today to 6.1% in 3 years time.

In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.6x on those 2028 earnings, up from -1.3x today.

Read the complete narrative.

Want to see how shrinking losses, improving margins, and a very different future earnings multiple all come together in one bold valuation story? Dive in.

Result: Fair Value of $11.97 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained high leverage and volatile, contract driven B2B revenues could easily derail the rebound story if execution or refinancing conditions disappoint.

Find out about the key risks to this Liberty Latin America narrative.

Build Your Own Liberty Latin America Narrative

If you are not fully persuaded by this view or would rather lean on your own analysis, you can build a fresh narrative in just a few minutes, Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Liberty Latin America.

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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.

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