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

Strengths

• Generates $1.5 billion in annual free cash flow (10.2% yield on market cap)
• High return on equity of 142.9% demonstrating efficient capital deployment
• Revenue growth of 16.1% demonstrates strong top-line momentum
• Attractive 4.7% dividend yield providing steady income returns
• FairStock composite score of 78/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Trades significantly above Graham Number ($21) with negative 142% margin of safety—limited downside protection
• High leverage at 6.05x debt-to-equity increases financial risk and interest expense burden
• Weak Piotroski F-Score of 3/9 suggests deteriorating financial quality across multiple dimensions
• Altman Z-Score of 0.9 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

LATAM Airlines Group S.A. American Depositary Shares (each representing two thousand (2000) shares of Common Stock) is a mid-cap industrials company valued at $15.0 billion. The business generates $14.3 billion in annual revenue with a 3.4% net margin and $1.5 billion in free cash flow. From a quality standpoint, LATAM shows weak Piotroski F-Score of 3/9 signaling deteriorating fundamentals and distressed Altman Z-Score of 0.9 warrants caution. On valuation, the stock is attractively valued at 10.2x earnings, with trades far above its Graham Number ($21) with no margin of safety. Growth dynamics show revenue growing at 16.1% and profit growth of 78.1%. The 4.7% dividend yield adds an income component for patient holders. Our composite FairStock Score of 78/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

LATAM's 16% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $1.5 billion in annual free cash flow (10.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 6.0x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer