LATAM Airlines Group S.A. American Depositary Shares (each representing two thousand (2000) shares of Common Stock) (LTM)

FairStock Score: 78/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital without needing heavy debt, and airlines rarely fit. LATAM is a large regional carrier: 160 destinations in 27 countries and 371 aircraft, with 43,341 employees, which gives it scale in Latin America. In fiscal Q2 2026, revenue was $4.1B and net income $125.2M—a 3.04% margin. That is profitable but thin, and it shows why airlines are fragile. At the 2026-10-13 close of $48.62, FairStock calculates a P/E of 8.99, which looks undemanding, and a PEG of 0.14. But other numbers give me pause. FairStock's price-to-book is 8.10, and its Graham Number is $27.02, leaving a margin of safety of -79.94%; I am paying a large premium to a conservative asset-based value. Debt-to-equity is 4.55, the FairStock Altman Z-score is 0.79, and the FairStock Piotroski F-score is 3/9, all signs of financial fragility. FairStock's return on equity is 107.99%, but that is flattered by leverage; ROCE is only 8.19%, modest for a capital-intensive carrier. EV/EBITDA of 9.19 is not obviously cheap for an airline. The market cap is $15.0B and the dividend yield is 2.99%, with beta 0.88. The Lynch category is 'none' because only 0 years of filed results are available under the rules, so I lack a long track record. Growth can be real, but leverage and cyclicality can erase equity quickly. I would want lower debt, better Z-score and F-score, and a price closer to Graham value before calling this a margin of safety.

In plain English: LATAM Airlines flies passengers and cargo across Latin America and other regions. In its latest reported quarter, it had $4.1 billion of revenue and $125.2 million of net income, so it is profitable but the profit margin is thin. At the recent price, the shares look expensive compared with the company's accounting value and a cautious value estimate, and the balance sheet carries heavy debt.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer