LATAM AIRLINES GROUP SA-ADR (LTM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LTM - US51817R1068 - ADR
66.2 USD
-0.26 (-0.39%)
LTM gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 22 industry peers in the Passenger Airlines industry. Both the profitability and the financial health of LTM get a neutral evaluation. Nothing too spectacular is happening here. While showing a medium growth rate, LTM is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- LTM had negative earnings in the past year.
- In the past year LTM had a positive cash flow from operations.
- In multiple years LTM reported negative net income over the last 5 years.
- In multiple years LTM reported negative operating cash flow during the last 5 years.
1.2 Ratios
- The Return On Assets of LTM (7.05%) is better than 90.91% of its industry peers.
- With an excellent Return On Equity value of 127.90%, LTM belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 15.79%, LTM belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 127.9% | ||
| ROIC | 15.79% |
ROA(3y)6.84%
ROA(5y)-8.7%
ROE(3y)1143.97%
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- Looking at the Profit Margin, with a value of 8.88%, LTM belongs to the top of the industry, outperforming 86.36% of the companies in the same industry.
- In the last couple of years the Profit Margin of LTM has grown nicely.
- LTM has a Operating Margin of 14.24%. This is amongst the best in the industry. LTM outperforms 86.36% of its industry peers.
- LTM's Operating Margin has improved in the last couple of years.
- LTM has a worse Gross Margin (27.19%) than 63.64% of its industry peers.
- LTM's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.24% | ||
| PM (TTM) | 8.88% | ||
| GM | 27.19% |
OM growth 3YN/A
OM growth 5Y9.93%
PM growth 3YN/A
PM growth 5Y32.12%
GM growth 3YN/A
GM growth 5Y3.89%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LTM is creating some value.
- LTM has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for LTM has been increased compared to 5 years ago.
- LTM has a better debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.70, we must say that LTM is in the distress zone and has some risk of bankruptcy.
- With a decent Altman-Z score value of 1.70, LTM is doing good in the industry, outperforming 72.73% of the companies in the same industry.
- LTM has a debt to FCF ratio of 5.56. This is a neutral value as LTM would need 5.56 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 5.56, LTM belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
- A Debt/Equity ratio of 7.40 is on the high side and indicates that LTM has dependencies on debt financing.
- LTM has a Debt to Equity ratio (7.40) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.4 | ||
| Debt/FCF | 5.56 | ||
| Altman-Z | 1.7 |
ROIC/WACC1.56
WACC10.15%
2.3 Liquidity
- LTM has a Current Ratio of 0.60. This is a bad value and indicates that LTM is not financially healthy enough and could expect problems in meeting its short term obligations.
- With a Current ratio value of 0.60, LTM perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
- A Quick Ratio of 0.53 indicates that LTM may have some problems paying its short term obligations.
- LTM has a Quick ratio of 0.53. This is comparable to the rest of the industry: LTM outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.53 |
3. Growth
3.1 Past
- The earnings per share for LTM have decreased strongly by -100.00% in the last year.
- The earnings per share for LTM have been decreasing by -50.65% on average. This is quite bad
- Looking at the last year, LTM shows a quite strong growth in Revenue. The Revenue has grown by 10.24% in the last year.
- LTM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.97% yearly.
EPS 1Y (TTM)-100%
EPS 3YN/A
EPS 5Y-50.65%
EPS Q2Q%-100%
Revenue 1Y (TTM)10.24%
Revenue growth 3Y37.99%
Revenue growth 5Y4.97%
Sales Q2Q%17.06%
3.2 Future
- LTM is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 995.44% yearly.
- LTM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.95% yearly.
EPS Next Y35.34%
EPS Next 2Y16.34%
EPS Next 3Y995.44%
EPS Next 5YN/A
Revenue Next Year9.14%
Revenue Next 2Y8.25%
Revenue Next 3Y7.95%
Revenue Next 5YN/A
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Forward Earnings ratio of 46.96, the valuation of LTM can be described as expensive.
- LTM's Price/Forward Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.95, LTM is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 46.96 |
4.2 Price Multiples
- Based on the Price/Free Cash Flow ratio, LTM is valued a bit cheaper than 72.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.04 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- LTM has a very decent profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as LTM's earnings are expected to grow with 995.44% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y16.34%
EPS Next 3Y995.44%
5. Dividend
5.1 Amount
- LTM has a Yearly Dividend Yield of 3.87%.
- Compared to an average industry Dividend Yield of 0.84, LTM pays a better dividend. On top of this LTM pays more dividend than 95.45% of the companies listed in the same industry.
- LTM's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.87% |
5.2 History
- The dividend of LTM decreases each year by -47.04%.
- LTM has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)-47.04%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- LTM pays out 25.08% of its income as dividend. This is a sustainable payout ratio.
DP25.08%
EPS Next 2Y16.34%
EPS Next 3Y995.44%
LATAM AIRLINES GROUP SA-ADR / LTM FAQ
What is the fundamental rating for LTM stock?
ChartMill assigns a fundamental rating of 5 / 10 to LTM.
What is the valuation status of LATAM AIRLINES GROUP SA-ADR (LTM) stock?
ChartMill assigns a valuation rating of 3 / 10 to LATAM AIRLINES GROUP SA-ADR (LTM). This can be considered as Overvalued.
Can you provide the profitability details for LATAM AIRLINES GROUP SA-ADR?
LATAM AIRLINES GROUP SA-ADR (LTM) has a profitability rating of 6 / 10.
What is the earnings growth outlook for LATAM AIRLINES GROUP SA-ADR?
The Earnings per Share (EPS) of LATAM AIRLINES GROUP SA-ADR (LTM) is expected to grow by 35.34% in the next year.