Litigation Capital Management (LIT) AI Stock Analysis

• Market Cap: £10.93M
• Dividend Yield: N/A
• Average Volume (3M): 2.73M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.31
• Revenue Growth: -44.60%
• EPS Growth: -658.40%
• Country: UK
• Employees: 6
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): -0.31
• Shares Outstanding: 114,281,296
• 10 Day Avg. Volume: 1,163,821
• 30 Day Avg. Volume: 2,729,150
• PEG Ratio: <0.01
• Price to Book (P/B): 1.10
• Price to Sales (P/S): -0.37
• P/FCF Ratio: -0.75
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: 10.50p ▲(10.18% Upside)

The overall stock score is primarily impacted by the company's weak financial performance, characterized by declining revenues, profitability issues, and increased leverage. Technical analysis also indicates a bearish trend, with the stock trading below key moving averages and weak momentum indicators. The valuation is unattractive due to a negative P/E ratio and no dividend yield.

Positive Factors

Outcome‑aligned, asset‑light business model

LIT's contingent funding model aligns returns with case outcomes and requires limited fixed infrastructure. This asset‑light approach can scale across matters and jurisdictions, preserving capital while offering durable upside when case selection and legal expertise produce repeatable recoveries.

Diversified origination and law‑firm partnerships

Established partnerships and a diversified case portfolio reduce single‑case concentration risk and support a steady pipeline of opportunities. Structural sourcing advantages with law firms can improve deal flow quality and underwriting leverage over time versus competitors without entrenched relationships.

Low market sensitivity

A low beta indicates the company's returns are historically less correlated with equity markets, offering a degree of defensive profile. For long‑term investors, this structural low market sensitivity can make litigation finance exposure attractive as a diversifying, less cyclical component of a broader portfolio.

Negative Factors

Severe revenue and margin deterioration

A near 60% revenue collapse and negative gross profit signal structural weaknesses in case outcomes, pricing or origination quality. Persistent revenue and margin declines erode underwriting economics and ROE, undermining the firm's capacity to generate durable, repeatable profits absent material operational or sourcing improvements.

Negative operating and free cash flows

Sustained negative operating and free cash flows reduce liquidity and force reliance on external funding to originate cases. Over the medium term, weak cash generation constrains growth, elevates refinancing risk, and limits the company's ability to capitalize on attractive opportunities or absorb adverse legal outcomes.

Rising leverage and balance sheet pressure

An increasing debt load amid falling profitability raises solvency and funding‑cost risks. Higher leverage reduces financial flexibility to hold longer‑dated cases, increases interest burdens, and amplifies downside in poor litigation outcomes, particularly problematic given inconsistent cash flows and shrinking equity returns.

Litigation Capital Management Business Overview & Revenue Model

Company Description

Litigation Capital Management (LIT) is a leading global provider of litigation financing solutions, specializing in funding legal proceedings across various sectors, including commercial litigation, arbitration, and class actions. The company focuses on offering capital to claimants and law firms to cover litigation costs, thus enabling access to justice while managing the financial risks associated with prolonged legal disputes. LIT operates in multiple jurisdictions, leveraging its expertise in litigation finance to support clients in achieving favorable legal outcomes.

How the Company Makes Money

Litigation Capital Management generates revenue primarily through its investment in legal cases, where it provides funding in exchange for a share of the proceeds from successful claims. When a funded case is resolved, either through a settlement or a court judgment, LIT receives a predetermined percentage of the monetary award or settlement amount. This model allows the company to profit from high-stakes litigation without bearing the upfront costs of legal expenses. Additionally, LIT may earn fees for due diligence and case assessment, providing further revenue streams. The company's partnerships with law firms and access to a diversified portfolio of funded cases enhance its earning potential, as successful outcomes in multiple jurisdictions contribute to overall profitability.

Litigation Capital Management Financial Statement Overview

Summary

Litigation Capital Management is facing financial difficulties, with declining revenues and profitability, increased leverage, and inconsistent cash flow performance. The company needs to address its operational inefficiencies and manage its debt levels to improve financial stability and shareholder value.

Income Statement

The company has experienced significant volatility in its revenue and profitability. The most recent year shows a dramatic decline in revenue by 59.55%, and gross profit is negative, indicating operational challenges. Historical data shows fluctuating revenue growth rates and profit margins, with a notable decline in the latest period. The negative EBIT and EBITDA margins in the latest year further highlight profitability issues.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio, but the recent increase in total debt is concerning. The equity ratio has been relatively stable, but the return on equity has decreased significantly, indicating reduced profitability for shareholders. The company's leverage has increased over time, posing potential risks.

Cash Flow

The cash flow situation is challenging, with negative operating and free cash flows in the latest period. Although there was a significant increase in free cash flow growth, the overall cash flow to net income ratios indicate inefficiencies in converting income into cash. Historical data shows inconsistent cash flow performance, raising concerns about liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	-176.02M	-163.12M	12.44M	184.74M	103.85M	37.06M
Gross Profit	-190.20M	-180.65M	-47.69M	65.44M	59.84M	26.62M
EBITDA	-47.21M	-47.21M	25.21M	168.03M	89.97M	15.76M
Net Income	-68.74M	-36.50M	12.71M	31.48M	34.61M	8.86M
Balance Sheet
Total Assets	213.08M	445.56M	591.80M	548.90M	407.06M	199.61M
Cash, Cash Equivalents and Short-Term Investments	8.82M	8.82M	533.33M	495.87M	346.94M	49.74M
Total Debt	37.18M	37.18M	61.92M	68.98M	211.59M	113.29M
Total Liabilities	331.19M	331.19M	402.86M	365.44M	258.13M	110.72M
Stockholders Equity	54.70M	54.70M	188.94M	183.47M	148.93M	88.87M
Cash Flow
Free Cash Flow	-64.41M	-80.46M	19.16M	84.50M	-55.26M	-56.56M
Operating Cash Flow	-64.41M	-43.51M	19.20M	84.59M	-55.22M	-56.54M
Investing Cash Flow	-99.07K	-103.63K	-31.00K	-198.00K	-335.00K	-70.00K
Financing Cash Flow	16.21M	18.17M	-55.58M	-32.61M	51.86M	74.14M

Litigation Capital Management Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.53
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 9.53 is below the 20-day moving average (MA) of 10.03, below the 50-day MA of 9.85, and below the 200-day MA of 26.01, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 49.76 is Neutral, neither overbought nor oversold. The STOCH value of 47.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:LIT.

Litigation Capital Management Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TIME	80 Outperform	£48.57M	7.93	8.50%	―	11.71%	31.15%
DFCH	73 Outperform	£109.12M	8.15	12.34%	―	17.35%	91.55%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
FCH	66 Neutral	£471.44M	27.13	3.93%	―	7.90%	―
BFSP	60 Neutral	£63.79M	46.46	0.99%	8.48%	―	―
ASAI	60 Neutral	£231.00M	6.40	39.40%	4.74%	―	―
LIT	44 Neutral	£10.93M	-0.27	-46.42%	―	-44.60%	-658.40%

Litigation Capital Management Corporate Events

Litigation Capital Management Gains Key Win in Poland Arbitration Challenge

Litigation Capital Management Limited reported a significant positive development in the high-profile international arbitration it funded against the Republic of Poland, after a Singapore court fully rejected Poland’s application to set aside a substantial Energy Charter Treaty award. The underlying case, which previously resulted in awards of £252 million plus interest under the ECT and £183 million plus interest under the Australia-Poland Bilateral Investment Treaty (with no double recovery allowed), has seen LCM invest US$11.3 million alongside its Fund I investors and now carries a contractual entitlement of about US$71.9 million in potential proceeds, of which US$18.0 million would accrue to LCM shareholders and US$53.9 million to Fund I investors; however, the company does not expect to earn a performance fee from Fund I on this matter due to earlier adverse fund outcomes, and any final benefit remains subject to a likely appeal by Poland and the timing of its resolution.

The most recent analyst rating on (GB:LIT) stock is a Sell with a £9.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.

Litigation Capital Management Wins Extension to Debt Covenant Waiver During Strategic Review

Litigation Capital Management has secured an extension of its debt covenant waiver from lender Northleaf Capital Partners to 31 January 2026, with the interest rate on the loan remaining 2 percentage points higher during the extended waiver period and no additional one-off waiver fee payable. The extension signals continued lender support while LCM progresses its ongoing strategic review, first announced in mid-September, with management planning to update the market on the review’s progress in the new year.

The most recent analyst rating on (GB:LIT) stock is a Hold with a £9.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.

LCM Faces A$12.9m Net Hit After Adverse Costs in Failed Queensland Power Class Action

Litigation Capital Management has disclosed that the Federal Court of Australia has quantified adverse costs totalling A$32.4 million in the unsuccessful Queensland electricity class action it funded against Stanwell Corporation and CS Energy, with A$16.2 million payable to each defendant. After applying its after-the-event insurance, LCM faces an uninsured exposure of A$12.9 million, with the balance to be met by Fund 1 investors; the case is under appeal with a hearing scheduled for March 2026, and the company remains in discussions with its principal lender while its previously announced strategic review continues, underscoring both the financial impact and the ongoing uncertainty for stakeholders around this high-cost litigation.

The most recent analyst rating on (GB:LIT) stock is a Hold with a £9.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.

Litigation Capital Management Passes All Resolutions at AGM

Litigation Capital Management Limited announced that all resolutions were passed at its Annual General Meeting in Australia. This development underscores LCM’s strong governance and strategic direction, potentially reinforcing its position in the disputes financing industry and providing assurance to stakeholders about its operational stability and future growth prospects.

The most recent analyst rating on (GB:LIT) stock is a Hold with a £30.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.

Litigation Capital Management Explores Strategic Options Amid Ongoing Review

Litigation Capital Management Limited is currently conducting a strategic review to explore potential options for the company’s future, with the assistance of Luminis Partners. The review is progressing well, with engagement from credible counterparties, and aims to identify a transaction that could benefit the company and its shareholders. While the secured lender has shown support through covenant relief, there is no certainty of a transaction materializing. The board will only recommend a transaction if it aligns with the best interests of the company and its stakeholders.

The most recent analyst rating on (GB:LIT) stock is a Hold with a £30.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.

Litigation Capital Management Releases 2025 Annual Report

Litigation Capital Management Limited has released its 2025 Annual Report and Accounts for the fiscal year ending June 30, 2025. This announcement highlights the company’s ongoing commitment to transparency and provides stakeholders with insights into its financial performance and strategic direction.

The most recent analyst rating on (GB:LIT) stock is a Hold with a £30.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.

Litigation Capital Management Announces 2025 AGM Details

Litigation Capital Management Limited (LCM) has announced its Annual General Meeting (AGM) for the year ended 30 June 2025, scheduled to be held in person on 27 November 2025 in Sydney, Australia. The meeting timing complies with the Australian Corporations Act, and UK shareholders are required to vote electronically. This AGM is significant for LCM as it provides a platform for shareholders to engage with the company’s leadership and discuss strategic directions, potentially impacting its operations and stakeholder relations.

The most recent analyst rating on (GB:LIT) stock is a Hold with a £30.00 price target. To see the full list of analyst forecasts on Litigation Capital Management stock, see the GB:LIT Stock Forecast page.