LM Funding America (LMFA) AI Stock Analysis

• Market Cap: $6.01M
• Dividend Yield: N/A
• Average Volume (3M): 34.49K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.66
• Revenue Growth: -15.31%
• EPS Growth: 29.06%
• Country: US
• Employees: 8
• Sector: Financial
• Sector Strength: 86
• Industry: Financial - Credit Services
• EPS (TTM): -5.09
• Shares Outstanding: 5,133,412
• 10 Day Avg. Volume: 29,355
• 30 Day Avg. Volume: 34,492
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.17
• Price to Cash Flow (P/CF): -0.50
• 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: $6.00
• Price Target Upside: 412.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

LM Funding America's overall score reflects significant financial challenges, with persistent losses and negative cash flows as key concerns. Despite operational improvements and strategic Bitcoin holdings, the bearish technical indicators and valuation issues due to lack of profitability weigh heavily on the score. The earnings call provided some positive developments, but they are overshadowed by fundamental weaknesses and market conditions.

Positive Factors

Earnings

LMFA reported 4Q24 results with revenue of $2.0M, beating the estimate of $1.6M and consensus of $1.5M.

Financial Performance

Adjusted EBITDA of $3.3M was well above the estimate and consensus for a loss of ($0.2M).

Strategic Expansion

A critical milestone occurred when LMFA acquired a 15MW mining facility in Oklahoma, enabling direct infrastructure management and lowering costs.

Negative Factors

Operational Challenges

LMFA reported 3Q24 revenue of $1.3M, down from $3.0M in 2Q24, largely due to a temporary slowdown in bitcoin mining production during the relocation of equipment to lower-cost sites.

Revenue Decline

Revenue declined 51% from $4.1M y/y due to the bitcoin halving, which reduced the effective mining output.

Stock Valuation

The 12-month price target is lowered to $4.50 from $6.00, due to LMFA's smaller scale and limited cash position.

LM Funding America Business Overview & Revenue Model

Company Description

LM Funding America, Inc. (LMFA) is a financial services company primarily engaged in providing funding solutions to community associations. The company specializes in offering funding to condominium associations, homeowners associations, and other community associations that are facing financial challenges due to delinquent accounts. By purchasing the rights to delinquent association receivables, LM Funding America enables these associations to maintain financial stability and continue their operations effectively.

How the Company Makes Money

LM Funding America makes money by purchasing delinquent accounts from community associations at a discounted rate and then collecting the full amount owed from the delinquent property owners. This business model allows the company to generate revenue from the difference between the discounted purchase price and the full collection amount. Additionally, LM Funding America may charge fees for its services, contributing further to its revenue streams. The company's financial performance can also be influenced by the efficiency of its collection processes and its ability to manage and mitigate risks associated with delinquent accounts.

LM Funding America Financial Statement Overview

Summary

LM Funding America shows revenue growth but faces profitability and cash flow challenges. The balance sheet is stable with a solid equity base, but rising debt levels and negative cash flows are concerning.

Income Statement

LM Funding America has experienced significant revenue growth with a remarkable increase from previous years. However, margins remain a concern with a negative net profit margin and EBIT margin, indicating ongoing profitability challenges. The gross profit margin is strong, but the company struggles with high net losses.

Balance Sheet

The balance sheet shows a solid equity base with a healthy equity ratio, but the company has increasing debt levels, leading to a rising debt-to-equity ratio. The return on equity is negative, reflecting the net losses. Overall, the balance sheet indicates reasonable stability but highlights leverage concerns.

Cash Flow

Cash flow analysis reveals negative free cash flow and operating cash flow, which are concerning. The free cash flow growth rate is negative, showing worsening cash flow generation. Ratios indicate inefficiencies in cash flow management relative to net income.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
3.20T	12.98M	5.36M	14.02M	1.29M	2.91M
	Gross Profit
3.20T	-3.22M	4.33M	13.77M	956.58K	2.29M
	EBIT
-7.29M	-10.06M	-27.80M	5.09M	-4.04M	-3.00M
	EBITDA
3.39M	-14.88M	-20.87M	4.44M	-4.04M	0.00
	Net Income Common Stockholders
-12.58M	-15.94M	-27.88M	4.76M	-4.04M	-3.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	2.40M	4.24M	34.69M	11.55M	1.07M
	Total Assets
0.00	37.71M	53.19M	62.10M	12.32M	7.64M
	Total Debt
0.00	763.75K	746.00K	182.69K	453.69K	4.42M
	Net Debt
0.00	-1.66M	-3.49M	-32.38M	-11.10M	3.35M
	Total Liabilities
0.00	2.85M	2.39M	646.34K	849.12K	4.81M
	Stockholders Equity
-2.55M	36.19M	49.19M	60.76M	11.46M	2.83M
Cash Flow		Free Cash Flow
-14.00M	-5.03M	-24.79M	-14.72M	-3.52M	-1.17M
	Operating Cash Flow
-13.06M	-3.40M	-9.14M	3.49M	-3.52M	-1.16M
	Investing Cash Flow
10.75M	2.30M	-18.89M	-23.96M	1.45M	-1.12M
	Financing Cash Flow
7.76M	-731.03K	-299.03K	41.48M	12.56M	-171.82K

LM Funding America Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LMFA, the sentiment is Negative. The current price of 1.17 is below the 20-day moving average (MA) of 1.34, below the 50-day MA of 1.52, and below the 200-day MA of 2.58, indicating a bearish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 37.84 is Neutral, neither overbought nor oversold. The STOCH value of 11.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LMFA.

LM Funding America Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$13.37B	9.30	9.39%	4.85%	16.11%	-8.85%
CNFR	48 Neutral	$7.58M	0.32	-291.99%	―	-18.97%	―
LMFA	42 Neutral	$6.01M	―	-19.98%	―	-15.31%	29.06%
PNBK	41 Neutral	$5.75M	―	-104.43%	―	3.86%	-804.39%
SNTG	39 Underperform	$4.57M	―	-16.13%	―	―	25.25%
AIEV	25 Underperform	$11.24M	―	-8.48%	―	―	-149.24%

LM Funding America Corporate Events

LM Funding America Expands and Strengthens Financial Position

LM Funding America has completed a $7.3 million acquisition of Tech Infrastructure JV I LLC’s assets, enhancing its digital mining capabilities. Furthermore, the company entered a warrant exercise deal, raising $5.1 million by enabling an institutional investor to exercise existing warrants. This move is anticipated to bolster LM Funding’s position in the cryptocurrency mining sector while addressing outstanding loans and leveraging new financial opportunities.

LM Funding America Expands with New Bitcoin Mining Site

LM Funding America, Inc. is set to acquire a 15 MW mining site in Oklahoma for $7.3 million, marking a strategic move to expand its Bitcoin mining operations. This acquisition includes essential infrastructure and is part of LM Funding’s plan to become a vertically integrated Bitcoin mining operation, enhancing its capacity and reducing costs. The deal underscores LM Funding’s commitment to growth in the cryptocurrency mining sector, with plans to optimize current facilities and reinvest in new opportunities.

LM Funding America Announces Key Approvals and Elections

LM Funding America, Inc. held its 2024 Annual Meeting where stockholders approved key proposals, including an Amended and Restated Incentive Plan to increase stock issuance and extend plan terms. Directors were elected, and the appointment of Malone Bailey, LLP as an accounting firm was ratified. Additionally, stockholders approved significant stock issuances under Nasdaq rules and executive compensation, reflecting active shareholder participation in strategic decisions.