Is Liberty Latin America Ltd. overvalued or undervalued?

As of 22 February 2024, Liberty Latin America Ltd. has moved from a fair to a risky valuation grade. The company is currently considered overvalued, given its significant financial challenges reflected in its ratios. The P/E ratio is not applicable due to the company being loss-making, while the Price to Book Value stands at 1.01, and the EV to EBITDA is at 3.72. Additionally, the Return on Equity (ROE) is notably negative at -14.85%, indicating inefficiencies in generating profit from equity.
When compared to peers, Liberty Latin America Ltd. shows a concerning picture. For instance, Lumen Technologies, Inc. has a P/E ratio of -8.05 and an EV to EBITDA of 5.85, while IDT Corp. stands out as attractive with a P/E of 18.33 and an EV to EBITDA of 12.45. The underperformance of Liberty Latin America is further highlighted by its stock returns, which have declined by 34.96% over the past year compared to a 10.26% increase in the S&P 500. This combination of factors solidifies the view that the company is overvalued in its current state.