LILAK · Liberty Latin America
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $8.86
Note written ·
How this view changed
- · Rated Medium. Results, 4 November 2026: Q3 2026 adjusted OIBDA rose 3% rebased to $454.0M at a 40.6% margin, net leverage fell to 4.5x from 4.6x, and buybacks passed $150M year to date.
Price against the kill line
11.3% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $8.86, on record since 10 November 2026. The shares are up 16.8% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $8.86, the earlier 52-week high that the shares cleared after the Q3 2026 report, which would show the breakout failing. A fourth-quarter 2026 report with falling rebased revenue and an adjusted OIBDA margin under 40% would also show the case failing.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Communication Services
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,117
- Revenue, change on a year (%)
- +0.4
- Gross margin (%)
- 79.1
- Operating margin (%)
- 16.2
- Free cash flow, four quarters ($M)
- 403
- Net cash, cash less debt ($M)
- −7,880
- Enterprise value to sales (×)
- 2.2
- Enterprise value to operating income (×)
- 15.5
All filed numbers
What Liberty Latin America reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,117 | +0.4 | 79.1 | 16.2 |
| first filed | 1,103 | +1.5 | 79.2 | 16.4 |
| first filed | 1,083 | −0.1 | 78.3 | 13.4 |
| first filed | 1,160 | +1.7 | 77.3 | 10.8 |
| first filed | 1,113 | +2.1 | 77.7 | 16.9 |
| first filed | 1,087 | −2.8 | 78.6 | −30.6 |
| Pre-tax income ($M) | −31.9 |
| Net income ($M) four quarters: −172 | −70.9 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −6.3 |
| Operating cash flow ($M) | 906 |
| Capital spending ($M) | 503 |
| Free cash flow ($M) | 403 |
| Cash and short-term investments ($M) | 546 |
| Debt ($M) long-term debt | 8,426 |
| Net cash, cash less debt ($M) | −7,880 |
| Deferred revenue ($M) +11.1% on a year | 209 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 679 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 445 |
| Market value ($M) | 1,920 |
| Enterprise value, market value plus net debt ($M) | 9,799 |
| Enterprise value to sales (×) | 2.2 |
| Enterprise value to operating income (×) | 15.5 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 4.3 |
| Free-cash-flow yield (%) | 21.0 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.9% of shares outstanding sold short, 4.7 days of average trading to cover, +5.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $6.2Mand 14 trades without a stated price | $275K |
| 12 monthsfrom | $127.6Mand 27 trades without a stated price | $108.5M |
The thesis
Liberty Latin America's shares are modestly more likely than not to beat the S&P 500 over the next three months. The third-quarter 2026 report showed wider margins, lower leverage and buybacks above $150 million, and the fourth-quarter report, expected around February 2027, tests whether rebased revenue stops falling.
The company reported on 4 November 2026 that revenue was $1,117.4 million, flat as reported and down 2% on a rebased basis. Adjusted operating income before depreciation and amortization (OIBDA) rose 3% rebased to $454.0 million, a 40.6% margin against 39.0% a year earlier. Net leverage fell to 4.5 times at 30 September 2026.
The market has priced in much of that improvement. The Class C shares closed at $9.77 on 12 November 2026, up 15.1% over three months from $8.49 on 14 August 2026, and 112% above the 52-week closing low of $4.79 on 18 June 2026. The 50-day average is $8.55 and the 200-day average is $6.86.
On 12 November 2026 the shares touched an intraday 52-week high of $10.42 and closed at $9.77, below the $10.30 close of 11 November 2026. The remaining weakness is revenue, debt of $8.5 billion and cash flow that management says arrives mostly in the fourth quarter.
Bullish and bearish views on Liberty Latin America Ltd.
The bull case on Liberty Latin America Ltd. (LILAK), in brief: margins widened again. The bear case: revenue is shrinking.
Bull case
- Margins widened again. Adjusted OIBDA was $454.0 million in the third quarter, up 3% rebased, at a 40.6% margin against 39.0% a year earlier (Q3 2026 earnings release, 4 November 2026).
- Leverage is falling. Net leverage was 4.5 times at 30 September 2026, from 4.6 times at 30 June 2026. Gross leverage was 4.8 times, from 5.1 times (same release).
- Buybacks are large. The company repurchased more than $150 million of shares in 2026 through the third quarter, nearly 10% of year-end 2025 common shares outstanding (earnings release, 4 November 2026; Reuters via Capital.com, 4 November 2026).
- Puerto Rico profit is rising. Liberty Puerto Rico's third-quarter adjusted OIBDA rose 8% to $102.7 million on a 35.6% margin (earnings release, 4 November 2026).
- Customers are still being added. The company added 56,000 postpaid mobile and broadband subscribers in the third quarter, led by C&W Panama and Liberty Costa Rica (Reuters via Capital.com, 4 November 2026).
- A director is buying the preference shares. Alfonso De Angoitia, through Grenadier S.A., bought 249,375 Series A Preference Shares in the open market on 9 November to 11 November 2026 at an average of $20.30 (SEC Form 4, filed 12 November 2026).
- Management expects momentum to improve. The company said it anticipates better revenue and adjusted OIBDA momentum in the fourth quarter of 2026 (Reuters via Capital.com, 4 November 2026).
Bear case
- Revenue is shrinking. Third-quarter rebased revenue fell 2%, and Liberty Puerto Rico's revenue fell 3% to $288.6 million. Margin gains therefore rest on cost cuts (earnings release, 4 November 2026).
- Debt is heavy. Adjusted total debt and finance leases were $8,514.3 million at 30 September 2026. Covenant net leverage at Liberty Puerto Rico was 12.8 times (earnings release).
- Cash flow is negative so far. Adjusted free cash flow was –$9.8 million in the third quarter and –$15.5 million for nine months, against –$157.4 million a year earlier. Management expects most of the year's cash flow in the fourth quarter (earnings release, 4 November 2026).
- The shares reversed from their high. They closed at $10.30 on 11 November 2026 and $9.77 on 12 November 2026, after an intraday high of $10.42, having risen from $8.91 on 5 November 2026.
- Hurricane exposure persists. The Atlantic season runs through 30 November 2026, and the footprint spans Puerto Rico, Jamaica and the wider Caribbean. Hurricane Melissa was already expected to weigh on Liberty Caribbean revenue through year-end.
Price setup
The shares closed at $8.91 on 5 November 2026 and $8.95 on 6 November 2026, then rose to $9.34 on 9 November 2026, $9.97 on 10 November 2026 and $10.30 on 11 November 2026. The 12 November 2026 close of $9.77 is 6.2% below the intraday 52-week high of $10.42 set that day.
The last close sits above the 50-day average of $8.55 and the 200-day average of $6.86, both as of 12 November 2026. The shares have held their gains from the report so far. The $10.30 close of 11 November 2026 is the highest close in the recent sessions, and the $10.42 intraday high is the next reference above the current price.
SEC Form 4 filings show grants of 3,489, 307 and 3,686 shares to three directors on 30 September 2026 at about $8.24 a share. The most recent open-market insider purchase on file, by director Alfonso De Angoitia, was of the preference shares, not the Class C common stock.
Catalysts ahead
- 30 November 2026: End of the Atlantic hurricane season. A landfall in Puerto Rico, Jamaica or the wider Caribbean could bring network damage disclosures; Hurricane Melissa was already expected to weigh on Liberty Caribbean revenue through year-end.
- 15 December 2026: Quarterly cash dividend date on the 9.0% Series A preference shares. The preference dividend ranks ahead of the common stock and draws on the same thin cash flow.
- ~February 2027 (est.): Fourth-quarter and full-year 2026 results. Management expects most cash flow and improving revenue momentum in the fourth quarter, so this report shows whether rebased revenue stops falling and free cash flow arrives.
What would change the view
A daily close below $8.86, the earlier 52-week high that the shares cleared after the Q3 2026 report, which would show the breakout failing. A fourth-quarter 2026 report with falling rebased revenue and an adjusted OIBDA margin under 40% would also show the case failing.
The risks this note tracks, each with what would confirm it:
- Rebased revenue keeps falling, so margin gains rest on cost cuts alone. Confirmed by: fourth-quarter 2026 rebased revenue down from a year earlier again, after the 2% decline in the third quarter of 2026.
- Cash flow fails to arrive in the fourth quarter, leaving buybacks and the preference dividend funded by cash balances and debt. Confirmed by: full-year 2026 adjusted free cash flow stays negative, or net leverage rises above 4.5 times at 31 December 2026.
- The shares have risen faster than results, so a miss against the improvement management guided could reverse the move. Confirmed by: a fourth-quarter 2026 adjusted OIBDA margin below the 40.6% reported for the third quarter of 2026.
- Hurricane damage in the Caribbean footprint hits revenue and costs. Confirmed by: a named storm landfall followed by a company network-damage disclosure.
What it trades with
LILAK is the non-voting Class C stock, and the Class A shares trade alongside it. With $8.5 billion of debt, the shares respond to high-yield credit spreads and refinancing costs. Revenue comes from Puerto Rico and the Caribbean, Panama and Costa Rica, so consumer conditions in those markets and Atlantic storms affect results. No current theme basket carries the name.
The evidence, claim by claim (8)
- Q3 2026 revenue $1,117.4 million, flat reported and down 2% rebased; adjusted OIBDA $454.0 million, up 3% rebased, margin 40.6% against 39.0% a year earlier. Q3 2026 earnings release (Form 8-K Ex-99.1) · as of
- Adjusted total debt and finance leases $8,514.3 million; gross leverage 4.8 times and net leverage 4.5 times, from 5.1 times and 4.6 times at 30 June. Q3 2026 earnings release (Form 8-K Ex-99.1) · as of
- Share repurchases exceeded $150 million in 2026 through the third quarter, nearly 10% of year-end 2025 common shares outstanding. Q3 2026 earnings release (Form 8-K Ex-99.1); Reuters via Capital.com · as of
- Adjusted free cash flow was –$9.8 million in Q3 and –$15.5 million for nine months, against –$157.4 million a year earlier; management expects most cash flow in Q4. Q3 2026 earnings release (Form 8-K Ex-99.1) · as of
- Liberty Puerto Rico Q3 revenue $288.6 million, down 3%; adjusted OIBDA $102.7 million, up 8%, margin 35.6%; covenant net leverage 12.8 times. Q3 2026 earnings release (Form 8-K Ex-99.1) · as of
- The company added 56,000 postpaid mobile and broadband subscribers in Q3 2026, led by C&W Panama and Liberty Costa Rica. Reuters via Capital.com, 4 November 2026 · as of
- Director Alfonso De Angoitia, through Grenadier S.A., bought 249,375 Series A Preference Shares in the open market on 9 November to 11 November 2026 at an average of $20.30. SEC Form 4 filed 12 November 2026 · as of
- Quarterly revenue of $1.12 billion against $1.11 billion in the same quarter a year earlier, for the period ended 30 September 2026. Form 10-Q (SEC XBRL) · as of
Sources
- SEC EDGAR
- Liberty Latin America's Q3 adjusted OIBDA rises · capital.com ·
- SEC EDGAR
- SEC EDGAR