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Litigation Capital Management (GB:LIT)
:LIT
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Litigation Capital Management (LIT) AI Stock Analysis

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GB:LIT

Litigation Capital Management

(LSE:LIT)

Rating:49Neutral
Price Target:
30.00p
▲(0.00%Upside)
Litigation Capital Management Limited faces challenges with declining revenue and significant legal and operational risks, as highlighted by recent corporate events. The stock's technical indicators suggest a bearish trend, and the negative P/E ratio is a concern. While financial management is strong, these risks weigh heavily on the overall score.

Litigation Capital Management (LIT) vs. iShares MSCI United Kingdom ETF (EWC)

Litigation Capital Management Business Overview & Revenue Model

Company DescriptionLitigation Capital Management (LIT) is a leading international provider of litigation finance and risk management services. The company operates primarily in the legal sector, offering financial solutions to law firms and plaintiffs involved in commercial disputes. LIT's core services include funding legal claims in exchange for a portion of the settlement or judgment, allowing clients to pursue litigation without bearing the financial risk.
How the Company Makes MoneyLitigation Capital Management makes money by providing capital to fund legal cases in exchange for a share of the proceeds if the case is successful. This revenue model involves assessing the potential outcomes of legal disputes and investing in those with a high likelihood of success. Key revenue streams include fees charged for funding services and the portion of settlements or awards from successful cases. Significant factors contributing to LIT's earnings include its expertise in legal risk assessment and strong relationships with law firms and legal professionals.

Litigation Capital Management Financial Statement Overview

Summary
Litigation Capital Management Limited demonstrates resilience with strong margins and a stable balance sheet. However, the significant revenue decline poses a challenge to growth prospects. The company effectively manages its debt, but improving revenue is critical for future performance.
Income Statement
55
Neutral
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
65
Positive
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
60
Neutral
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.
BreakdownJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue12.44M184.74M103.85M37.06M38.44M
Gross Profit-47.69M65.44M59.84M26.62M21.72M
EBITDA25.21M168.03M89.97M15.76M10.36M
Net Income12.71M31.48M34.61M8.86M5.25M
Balance Sheet
Total Assets591.80M548.90M407.06M199.61M110.83M
Cash, Cash Equivalents and Short-Term Investments533.33M495.87M346.94M49.74M31.75M
Total Debt61.92M312.97M211.59M113.29M12.60M
Total Liabilities402.86M365.44M258.13M110.72M29.81M
Stockholders Equity188.94M183.47M148.93M88.87M81.00M
Cash Flow
Free Cash Flow19.16M84.50M-55.26M-56.56M-28.24M
Operating Cash Flow19.20M84.59M-55.22M-56.54M-28.19M
Investing Cash Flow-31.00K-198.00K-335.00K-70.00K-345.00K
Financing Cash Flow-55.58M-32.61M51.86M74.14M10.71M

Litigation Capital Management Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price30.00
Price Trends
50DMA
34.03
Negative
100DMA
44.07
Negative
200DMA
70.84
Negative
Market Momentum
MACD
-1.21
Negative
RSI
51.38
Neutral
STOCH
50.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:LIT, the sentiment is Neutral. The current price of 30 is above the 20-day moving average (MA) of 27.30, below the 50-day MA of 34.03, and below the 200-day MA of 70.84, indicating a neutral trend. The MACD of -1.21 indicates Negative momentum. The RSI at 51.38 is Neutral, neither overbought nor oversold. The STOCH value of 50.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:LIT.

Litigation Capital Management Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
£74.49M5.7713.00%26.02%340.22%
74
Outperform
£13.24M5.7411.96%1.61%17.87%52.54%
65
Neutral
£5.07B8.055.57%5.02%25.79%-17.21%
49
Neutral
£34.28M10.02-1.54%4.17%-60.87%-106.15%
45
Neutral
£2.58M-1088.89%31.87%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:LIT
Litigation Capital Management
30.00
-73.69
-71.07%
GB:LEND
Sancus Lending Group
0.45
-0.06
-11.76%
GB:ORCH
Orchard Funding
62.00
31.26
101.69%
GB:DFCH
Distribution Finance Capital Holdings Plc
45.50
14.30
45.83%

Litigation Capital Management Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
Litigation Capital Management Announces Change in Major Holdings
Neutral
Jun 23, 2025

Litigation Capital Management Limited has announced a change in its major holdings, with Perpetual Limited crossing a significant voting rights threshold. This adjustment in voting rights, now at 2.888%, reflects a slight decrease from the previous position and may impact the company’s governance and decision-making processes.

Legal ProceedingsBusiness Operations and StrategyFinancial Disclosures
Litigation Capital Management Faces Judgment Setback and Pauses Fund III Marketing
Negative
Jun 19, 2025

Litigation Capital Management (LCM) announced a High Court judgment against its funded party in a commercial litigation case, impacting its financials with a recorded investment value of £5.0m. The company is reviewing the judgment and potential next steps. Additionally, LCM provided a trading update, noting modest realisations in the second half of the financial year and a significant increase in net debt to A$73m. The company has paused active marketing of Fund III due to uncertainties in the US litigation finance market and political developments, with plans to resume in late 2025 or early 2026. LCM remains confident in its dispute finance sector fundamentals and its differentiated model despite recent trial losses.

Legal ProceedingsBusiness Operations and Strategy
Litigation Capital Management Responds to Media Speculation on Dubai Investigation
Neutral
May 13, 2025

Litigation Capital Management (LCM) has addressed recent media speculation regarding a potential investigation by a Dubai legal authority. The company clarified that it has not been contacted by any legal authority concerning the allegations and believes the claims lack merit. LCM is conducting its own investigation and will provide updates as necessary. This announcement underscores LCM’s commitment to transparency and may reassure stakeholders about its operational integrity amidst the speculation.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 02, 2025