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Burford Capital (GB:BUR)
LSE:BUR

Burford Capital (BUR) AI Stock Analysis

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Burford Capital

(LSE:BUR)

63Neutral
Burford Capital's overall score reflects a strong balance sheet and cash performance but is tempered by operational challenges and bearish technical indicators. Strong earnings call highlights and positive corporate events bolster future prospects, offsetting some concerns about valuation and profitability.
Positive Factors
Earnings
Burford reported a better than expected quarter as capital provision income and total revenue were above consensus estimates.
Market Position
Burford is the market leader in litigation finance, an industry undergoing structural transition as more corporations opt to outsource their litigation.
Negative Factors
New Business Metrics
New Burford-only capital provision direct commitments decreased in 3Q compared to 2Q, indicating a slight decline in new business metrics year to date.

Burford Capital (BUR) vs. S&P 500 (SPY)

Burford Capital Business Overview & Revenue Model

Company DescriptionBurford Capital Limited is a leading global finance and investment management firm focused on the legal sector. It provides a range of services including litigation finance, risk management, and asset recovery solutions to law firms and corporate clients. Established in 2009, Burford has become a key player in the legal finance industry, facilitating access to justice by providing capital to cover the costs associated with litigation and arbitration.
How the Company Makes MoneyBurford Capital makes money primarily through its litigation finance business, where it invests capital in legal claims and earns a return if the claim is successful. This involves providing funding to law firms or plaintiffs to cover legal fees and expenses in exchange for a portion of the settlement or judgment. Additionally, Burford generates revenue through its asset management activities, managing third-party capital alongside its own, and earning fees based on the performance of these managed funds. The company's earnings are also influenced by its strategic partnerships with law firms and corporations, which expand its reach and investment opportunities in the legal market.

Burford Capital Financial Statement Overview

Summary
Burford Capital shows a mixed financial performance with a robust balance sheet free of debt, improved cash flow management, and strong equity ratios. However, it faces challenges with declining profitability and operational losses as indicated by its income statement.
Income Statement
45
Neutral
Burford Capital has shown a volatile revenue trajectory with significant fluctuations. The gross profit margin was stable in 2024, but net profit margin decreased due to a drastic decline in revenue and operating losses. The EBIT margin turned negative, indicating operational challenges.
Balance Sheet
75
Positive
The company maintains a solid equity base with no debt in 2024, improving its debt-to-equity position significantly. Equity ratio remains strong, indicating a healthy balance sheet and reduced financial risk.
Cash Flow
65
Positive
Burford Capital's free cash flow improved significantly in 2024, turning positive after previous years of negative cash flows. Operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
84.65M341.23M1.08B158.09M-12.76M316.68M
Gross Profit
78.22M341.23M1.06B149.85M-18.05M311.83M
EBIT
17.53M-769.22M815.67M186.41M-75.08M208.63M
EBITDA
73.77M0.00821.19M0.000.00218.93M
Net Income Common Stockholders
-69.70M146.48M610.52M97.46M-56.43M143.28M
Balance SheetCash, Cash Equivalents and Short-Term Investments
469.93M469.93M328.11M107.66M180.25M322.19M
Total Assets
6.18B6.18B5.84B4.29B3.52B2.73B
Total Debt
0.000.001.55B1.27B1.03B681.33M
Net Debt
-469.93M-469.93M-220.55M1.16B854.20M359.14M
Total Liabilities
2.92B2.92B2.63B1.90B1.58B1.03B
Stockholders Equity
2.42B2.42B2.29B1.74B1.55B1.70B
Cash FlowFree Cash Flow
-27.75M216.06M-277.89M-466.51M-585.65M180.31M
Operating Cash Flow
-27.65M216.72M-274.68M-466.10M-585.36M180.67M
Investing Cash Flow
-108.00K-661.00K-3.21M-407.00K-285.00K-360.00K
Financing Cash Flow
215.43M33.83M389.53M399.13M444.83M-45.21M

Burford Capital Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1044.00
Price Trends
50DMA
1121.43
Negative
100DMA
1088.33
Negative
200DMA
1056.05
Negative
Market Momentum
MACD
-32.92
Positive
RSI
38.47
Neutral
STOCH
10.16
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BUR, the sentiment is Negative. The current price of 1044 is below the 20-day moving average (MA) of 1146.83, below the 50-day MA of 1121.43, and below the 200-day MA of 1056.05, indicating a bearish trend. The MACD of -32.92 indicates Positive momentum. The RSI at 38.47 is Neutral, neither overbought nor oversold. The STOCH value of 10.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BUR.

Burford Capital Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
64
Neutral
$13.79B10.529.20%4.24%17.25%-7.60%
GBBUR
63
Neutral
£2.22B19.446.07%0.98%-51.54%-77.07%
GBBEG
56
Neutral
£146.27M59.873.11%4.37%13.88%512.00%
GBLIT
55
Neutral
£72.00M10.276.76%1.98%-51.42%-60.99%
52
Neutral
£39.17M426.190.22%31.96%-95.27%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BUR
Burford Capital
1,044.00
-20.31
-1.91%
GB:BEG
Begbies Traynor
93.00
-14.05
-13.12%
GB:LIT
Litigation Capital Management Limited
63.00
-35.16
-35.82%
GB:MANO
Manolete Partners Plc
89.50
-25.50
-22.17%

Burford Capital Earnings Call Summary

Earnings Call Date: Mar 3, 2025 | % Change Since: -15.47% | Next Earnings Date: Jun 17, 2025
Earnings Call Sentiment Positive
Burford Capital's earnings call for Fiscal Year 2024 highlighted a record-breaking year in terms of cash realizations and net realized gains, driven by successful case outcomes and strong portfolio growth. Despite these positives, the company faced unrealized losses primarily due to discount rate volatility and ongoing legal appeals related to YPF assets. However, the highlights significantly outweigh the lowlights, showcasing a robust financial performance and optimistic future outlook.
Highlights
Record Cash Realizations
Burford Capital achieved a record year for cash realizations, bringing in more cash than ever before in its history. Realizations were very high, with a significant amount of cash brought in from a variety of successful cases.
Strong Net Realized Gains
The company reported net realized gains as an annual record by a wide margin. Net realized gains were up 75% year-over-year, driven by multiple successful case resolutions.
Portfolio Growth
The portfolio grew at a 15% CAGR over the past several years, with 2024 portfolio growth at about 8%. New business target realizations set a new record.
High Return on Invested Capital (ROIC)
The 2024 net realized gains reflected a more than 100% ROIC, significantly higher than the prior year and above historical averages.
Strong Cash Position
Burford Capital ended the year with over $500 million in cash and securities, a significant increase driven by almost $700 million in cash receipts.
Lowlights
Unrealized Losses
The fourth quarter of 2024 showed a negative number for unrealized losses, primarily driven by the transfer of previously recognized unrealized gains into realized gains and discount rate volatility.
Operating Expenses
While operating expenses were down significantly, there were accounting movements due to share-based compensation liabilities affected by stock price changes.
Pending YPF Appeals
Ongoing appeals in the YPF-related assets, with Argentina appealing liability to the Second Circuit and cross appeals on YPF corporate defendants, are adding uncertainty around the asset's future resolution.
Company Guidance
During the call, Burford Capital provided guidance indicating a strong fiscal year 2024, with a significant focus on cash performance and portfolio growth. The company reported a record-breaking $641 million in realizations, leading to $327 million in net realized gains, which represents a 75% increase from the prior year. The return on invested capital (ROIC) was noted at 108%, reflecting robust portfolio performance. The portfolio has grown at a compound annual growth rate (CAGR) of 15% over the last several years, with a specific 8% growth during 2024. Target realizations for new business were up significantly, setting a new record. The company also highlighted a continued focus on cash generation, with nearly $700 million in cash receipts and an increase in net realized gains that more than doubled from the previous year. Additionally, the company is maintaining a strategic focus on both new business growth and high levels of portfolio activity, anticipating continued strong performance in the upcoming fiscal periods.

Burford Capital Corporate Events

Other
Burford Capital Executives Invest Heavily in Company Shares
Positive
Mar 11, 2025

Burford Capital announced significant investments by its executive officers and a non-executive director in the company’s ordinary shares, totaling over $17.5 million. This move reflects strong confidence in the company’s performance and future prospects, as highlighted by CEO Christopher Bogart, who emphasized alignment with shareholders and the potential for generating shareholder value.

Financial DisclosuresRegulatory Filings and Compliance
Burford Capital Files 2024 Annual Report
Neutral
Mar 4, 2025

Burford Capital Limited has filed its Annual Report on Form 10-K for the year ending December 31, 2024, with the US Securities and Exchange Commission. This filing, which includes audited consolidated financial statements, marks a significant step in the company’s financial reporting and transparency efforts, potentially impacting its operations and stakeholder confidence.

DividendsFinancial Disclosures
Burford Capital Reports 2024 Financial Results and Declares Dividend
Positive
Mar 3, 2025

Burford Capital announced its preliminary unaudited financial results for the fourth quarter and full year of 2024, highlighting a declared final dividend of $0.0625 per share, pending shareholder approval. This announcement reflects Burford’s continued focus on delivering value to shareholders and maintaining its position as a leader in legal finance and asset management.

Business Operations and StrategyFinancial Disclosures
Burford Capital to Release FY24 Results and Update Reporting Framework
Neutral
Feb 25, 2025

Burford Capital announced the release date for its fourth quarter and full-year 2024 financial results, set for March 3, 2025. The company also previewed changes to its financial reporting framework as it transitions to a US domestic issuer. This shift involves enhanced segment reporting and streamlined disclosures, reflecting the company’s growing US-based investor ownership. These changes are expected to provide clearer insights into Burford’s operations and shareholder value generation, potentially impacting its market positioning and stakeholder relations.

Business Operations and Strategy
Burford Capital to Host Investor Day in 2025
Positive
Feb 4, 2025

Burford Capital has announced its 2025 Investor Day to be held in New York City on April 3, 2025, with options for in-person attendance and live webcast. The event will provide strategic updates about the company’s operations and serve as an introduction for new investors and analysts, indicating Burford’s effort to strengthen its market presence and investor relations.

Executive/Board ChangesRegulatory Filings and Compliance
Burford Capital Executives Execute Pre-Planned Share Sales
Neutral
Jan 31, 2025

Burford Capital announced the sale of 190,500 of its ordinary shares by key executives as part of pre-established share liquidity plans. These transactions, managed by Merrill Lynch, are structured to satisfy regulatory requirements and ensure compliance with relevant financial regulations, potentially impacting the company’s shareholding structure but maintaining transparency with stakeholders.

Burford Capital Issues New Shares Under Incentive Plan
Dec 27, 2024

Burford Capital has issued 528 new ordinary shares in connection with its 2016 Long Term Incentive Plan. These shares, intended to satisfy the vesting of restricted stock units, will be traded on the AIM market of the London Stock Exchange and listed on the New York Stock Exchange. The issuance increases the company’s total voting rights to 219,421,904 shares, impacting shareholder calculations under the UK Financial Conduct Authority’s guidelines.

Burford Capital Updates Executive Shareholdings Amid Minor Corrections
Dec 17, 2024

Burford Capital has announced corrections to previously reported shares held by its persons discharging managerial responsibilities (PDMRs) due to discrepancies in the calculation of matching contributions within their Deferred Compensation Plan. The adjustments involve minor differences in the unvested notional shares allocated to several executives, resulting from rounding errors in the matching contributions. Additionally, the company amended the reported holdings of its non-executive director, Pamela Corrie, to reflect accurate share acquisition through a dividend reinvestment option. These updates are expected to have a minimal impact on the company’s operations and stakeholder interests.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.