Litigation Capital Management Limited (LIT) AI Stock Analysis

• Market Cap: £72.00M
• Dividend Yield: 1.95%
• Average Volume (3M): 321.65K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.32
• Revenue Growth: -51.42%
• EPS Growth: -60.99%
• Country: UK
• Employees: 6
• Sector: Financial
• Sector Strength: 77
• Industry: Credit Finance
• EPS (TTM): 0.06
• Shares Outstanding: 114,281,296
• 10 Day Avg. Volume: 280,615
• 30 Day Avg. Volume: 321,649
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 11.82
• Price to Cash Flow (P/CF): -7.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 182.00p
• Price Target Upside: 183.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Litigation Capital Management Limited's overall stock score reflects its financial resilience but also highlights significant challenges. The company's strong margins and efficient cost management are overshadowed by a notable decline in revenue. Technical analysis indicates a bearish trend, which could deter short-term investors. Valuation metrics show potential undervaluation, particularly given the reasonable P/E ratio and dividend yield. However, legal challenges add uncertainty, impacting investor confidence and stock performance.

Litigation Capital Management Limited Business Overview & Revenue Model

Company Description

Litigation Capital Management Limited (LIT) is a leading provider of litigation financing solutions, specializing in funding legal claims and disputes. The company operates in the sectors of litigation finance and asset management, offering financial support and strategic advice to claimants involved in complex legal proceedings. LIT's core services include providing capital for legal costs, enabling clients to pursue claims without the burden of upfront expenses, and sharing the risk of legal outcomes.

How the Company Makes Money

Litigation Capital Management Limited makes money primarily by investing in legal claims and disputes and earning a return on these investments. The company provides funding to claimants in exchange for a portion of the proceeds from successful legal outcomes. This financing model allows LIT to share in the financial success of the cases it funds. Key revenue streams include returns from successful litigation investments, management fees, and interest on capital deployed. Additionally, LIT may enter into significant partnerships with legal firms and other financial entities to enhance its funding capabilities and expand its reach in the litigation finance sector.

Litigation Capital Management Limited Financial Statement Overview

Summary

Litigation Capital Management Limited shows resilience in its financial management, with strong margins and a healthy balance sheet. However, the substantial revenue drop poses a challenge to growth prospects. The company appears to be managing its debt effectively, but sustained improvement in revenue is crucial for future performance.

Income Statement

The company experienced a significant decline in total revenue from 2023 to 2024, with a 46.2% drop. Gross and net profit margins remain relatively stable, but the reduced revenue impacts overall profitability. EBIT and EBITDA margins are strong, suggesting efficient cost management despite revenue challenges.

Balance Sheet

The balance sheet showcases a stable equity position with an equity ratio of approximately 31.9% in 2024. The debt-to-equity ratio improved to 0.33, indicating a reduction in leverage. ROE decreased due to lower net income, but the company maintains a solid cash position.

Cash Flow

Cash flow from operations is positive, but there is a noticeable decline from the previous year. Free cash flow remains positive, indicating the company can cover capital expenditures. The operating cash flow to net income ratio suggests efficient cash generation from operations despite revenue challenges.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
99.37M	184.74M	103.85M	37.06M	38.44M
	Gross Profit
39.24M	65.44M	59.84M	26.62M	21.72M
	EBIT
76.09M	169.70M	89.68M	15.41M	10.27M
	EBITDA
25.21M	168.03M	89.97M	15.76M	10.36M
	Net Income Common Stockholders
12.71M	31.48M	34.61M	8.86M	5.25M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
533.33M	495.87M	346.94M	49.74M	31.75M
	Total Assets
591.80M	548.90M	407.06M	199.61M	110.83M
	Total Debt
61.92M	312.97M	211.59M	113.29M	12.60M
	Net Debt
8.89M	208.51M	161.63M	63.56M	-19.15M
	Total Liabilities
402.86M	365.44M	258.13M	110.72M	29.81M
	Stockholders Equity
188.94M	183.47M	148.93M	88.87M	81.00M
Cash Flow		Free Cash Flow
19.16M	84.50M	-55.26M	-56.56M	-28.24M
	Operating Cash Flow
19.20M	84.59M	-55.22M	-56.54M	-28.19M
	Investing Cash Flow
-31.00K	-198.00K	-335.00K	-70.00K	-345.00K
	Financing Cash Flow
-55.58M	-32.61M	51.86M	74.14M	10.71M

Litigation Capital Management Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 64.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:LIT, the sentiment is Negative. The current price of 64.2 is below the 20-day moving average (MA) of 70.66, below the 50-day MA of 83.63, and below the 200-day MA of 100.72, indicating a bearish trend. The MACD of -5.84 indicates Negative momentum. The RSI at 27.72 is Positive, neither overbought nor oversold. The STOCH value of 14.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:LIT.

Litigation Capital Management Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$13.80B	10.64	9.23%	4.22%	17.66%	-7.66%
BUR	63 Neutral	£2.22B	19.44	6.07%	0.98%	-51.54%	-77.07%
LIT	55 Neutral	£72.00M	10.27	6.76%	1.95%	-51.42%	-60.99%
MANO	52 Neutral	£39.17M	426.19	0.22%	―	31.96%	-95.27%

Litigation Capital Management Limited Corporate Events

Litigation Capital Management Files Appeal in Class Action Case

Litigation Capital Management Limited announced that an appeal has been filed in a class action case funded by LCM against Stanwell Corporation LTD and CS Energy LTD, following a first instance judgment that ruled against LCM’s funded party. This development may impact LCM’s operations and investor relations, with further engagement expected after the publication of interim results in March 2025.

Litigation Capital Management Files Appeal in Class Action Case

Litigation Capital Management Limited announced that an appeal has been filed in a class action case it funded against Stanwell Corporation LTD and CS Energy LTD on behalf of Queensland electricity users. The initial judgment was not in favor of LCM’s funded party, but the company is looking forward to further engagement with investors following the publication of its interim results in March 2025. This development could impact LCM’s operations and its position in the dispute financing industry, as the outcome of the appeal may influence stakeholder confidence and future investment strategies.

Litigation Capital Management Faces Unusual Judgment Outcome in Quintis Class Action

Litigation Capital Management Limited announced that the Federal Court of Australia delivered a judgment in a class action investment they funded on behalf of Quintis Limited shareholders. The court found misleading and deceptive conduct by Quintis’s former director and its auditors, but LCM’s funded party did not establish that this conduct caused them loss, leaving the case unsuccessful. LCM invested A$13.2 million and is now considering the merits of an appeal, highlighting an unusual judgment outcome and reaffirming its commitment to disciplined risk management and capital allocation.

Litigation Capital Management Sees Increase in Major Shareholder Voting Rights

Litigation Capital Management Ltd has announced an increase in the voting rights held by Boutique Capital Pty Ltd through the Tectonic Opportunities Fund, which has now reached 5.1% of the total voting rights. This acquisition underscores a significant shift in shareholder influence within the company, potentially affecting its governance and strategic decisions. The previous holding was at 4.3%, indicating a notable increase in investment and interest in the company’s future prospects.

Litigation Capital Management Reports Mixed Results for H1 2025

Litigation Capital Management Limited reported mixed results for the first half of the 2025 financial year, achieving four case wins and incurring three losses. Despite these mixed outcomes, the company reported a strong multiple of invested capital of 3.7x, largely driven by successful arbitration against the Republic of Poland. However, the first half saw a modest loss after tax of approximately A$8 million, influenced by increased investment into ongoing cases and a write-down of the Queensland Electricity case. Net debt rose significantly, but LCM entered a new US$75 million credit facility to support future growth. The period also saw A$25 million in new commitments, reflecting fewer quality opportunities but maintaining confidence in future prospects.

Litigation Capital Management Announces Change in Major Holdings

Litigation Capital Management Limited, a non-UK issuer, has announced a change in major holdings due to an acquisition of voting rights by Boutique Capital Pty Ltd ATF Tectonic Opportunities Fund, based in Sydney, Australia. The fund’s voting rights in Litigation Capital Management have increased from 3.2% to 4.3%, indicating a strengthened position in the company. This development may impact the company’s stakeholder dynamics and influence its strategic decisions moving forward.

LCM Announces Directorate Change as Seebacher Steps Down

Litigation Capital Management Limited announced the resignation of Gerhard Seebacher from his role as a Non-Executive Director due to his new appointment at Jain Global, a global hedge fund. The company’s Nominations Committee is in the process of selecting a suitable replacement, expected to be announced in the first quarter of 2025. The departure is seen as amicable, with both Seebacher and the company expressing mutual respect and well wishes, indicating a continued strong foundation for LCM’s future growth.

LCM Announces Board Change Amid Expansion Plans

Litigation Capital Management Limited announced the resignation of Gerhard Seebacher as a Non-Executive Director effective January 15, 2025, following his new appointment at Jain Global. The company is in the process of selecting a new board member, expected to be announced in early 2025, to support its expansion efforts. The departure of Seebacher, who contributed significantly to the company’s growth, does not affect its strategic direction as LCM is focused on furthering its market position.