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. The US$1.5b market-cap company announced a latest loss of US$74m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Liberty Latin America's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Consensus from 5 of the American Telecom analysts is that Liberty Latin America is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$104m in 2025. So, the company is predicted to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 91% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Liberty Latin America's growth isn't the focus of this broad overview, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Liberty Latin America is its debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Liberty Latin America which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Liberty Latin America, take a look at Liberty Latin America's company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

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.

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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.