LATAM Airlines Group S.A.
LATAM Airlines Group S.A. Fundamental Analysis
LATAM Airlines Group S.A. (LTM) shows moderate financial fundamentals with a PE ratio of 11.35, profit margin of 10.26%, and ROE of 1.36%. The company generates $14.3B in annual revenue with strong year-over-year growth of 10.24%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze LTM's fundamental strength across five key dimensions:
Efficiency Score
WeakLTM struggles to generate sufficient returns from assets.
Valuation Score
ExcellentLTM trades at attractive valuation levels.
Growth Score
ExcellentLTM delivers strong and consistent growth momentum.
Financial Health Score
WeakLTM carries high financial risk with limited liquidity.
Profitability Score
ModerateLTM maintains healthy but balanced margins.
Key Financial Metrics
Is LTM Expensive or Cheap?
P/E Ratio
LTM trades at 11.35 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, LTM's PEG of 0.60 indicates potential undervaluation.
Price to Book
The market values LATAM Airlines Group S.A. at 12.32 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 2.97 times EBITDA. This is generally considered low.
How Well Does LTM Make Money?
Net Profit Margin
For every $100 in sales, LATAM Airlines Group S.A. keeps $10.26 as profit after all expenses.
Operating Margin
Core operations generate 16.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.36 in profit for every $100 of shareholder equity.
ROA
LATAM Airlines Group S.A. generates $8.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
LATAM Airlines Group S.A. produces operating cash flow of $3.33B, showing steady but balanced cash generation.
Free Cash Flow
LATAM Airlines Group S.A. generates strong free cash flow of $1.53B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.30 in free cash annually.
FCF Yield
LTM converts 9.16% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.35
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.60
vs 25 benchmark
P/B Ratio
Price to book value ratio
12.32
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.17
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
6.01
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.60
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
1.36
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.23
vs 25 benchmark
How LTM Stacks Against Its Sector Peers
| Metric | LTM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.35 | 26.76 | Better (Cheaper) |
| ROE | 135.50% | 1300.00% | Weak |
| Net Margin | 10.26% | -29570.00% (disorted) | Strong |
| Debt/Equity | 6.01 | 0.79 | Weak (High Leverage) |
| Current Ratio | 0.60 | 10.68 | Weak Liquidity |
| ROA | 8.28% | -1545134.00% (disorted) | Weak |
LTM outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews LATAM Airlines Group S.A.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-97.71%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
-90.77%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
-98.02%
Industry Style: Cyclical, Value, Infrastructure
Declining