We feel now is a pretty good time to analyse Liberty Latin America Ltd.'s (NASDAQ:LILA) business as it appears the company may be on the cusp of a considerable accomplishment. 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. The most pressing concern for investors is Liberty Latin America's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Liberty Latin America

Consensus from 6 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$80m in 2025. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 117%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Liberty Latin America's upcoming projects, 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.

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, which in this case, the company has significantly overshot. Note that a higher debt obligation 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 compiled a list of pertinent aspects 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.