LTMLATAM Airlines Group S.A.
Is the business good?
The checks split: earnings fully cash-backed (1.8×), but returns that lean on debt.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Margins have held roughly steady, a stable cost structure.
Leverage-amplified, a high assets-to-equity ratio does much of the work. ROE 109% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is LTM?
LATAM Airlines Group S.A. earns 26% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 17 points above what the capital costs: growth creates value
- Operating margin
- 16%
Operating margin · Airlines median 7.9% · fiscal year to FY2025
- Cash conversion
- 1.77×
Cash conversion · 2.05× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −2.5%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | −115% |
| FY2021 | −70% |
| FY2022 | 13% |
| FY2023 | 9.3% |
| FY2024 | 12% |
| FY2025 | 16% |
Details›
- Gross marginfiscal year to FY2025
- 29%
- Operating marginfiscal year to FY2025
- 16%
- Net marginfiscal year to FY2025
- 10%
- Free cash flow margin
- 14%
- Revenue, trailing twelve months
- $14.3B
- Free cash flow, trailing twelve months
- $1.96B
- Net income, trailing twelve months
- $1.46B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 26%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.