Investment Thesis
Burford Capital is in severe financial distress with massive asset write-downs (-1.6B net income), negative operating cash flow of -136.6M, and unsustainable leverage of 2.90x debt-to-equity. At current burn rates, the company's 702.6M cash reserve provides only ~5 quarters of runway before liquidity crisis.
Strengths
- Maintains 702.6M in cash providing short-term liquidity cushion
- Total asset base of 4.3B provides potential recovery value in liquidation scenario
- Elevated insider activity (18 Form 4 filings) may indicate management confidence, though limited given context
Risks
- Negative free cash flow of -136.6M quarterly; company burning through reserves unsustainably
- Interest coverage ratio of -32.9x indicates inability to service 2.4B long-term debt from operations
- Massive asset write-downs suggest portfolio deterioration; additional impairments likely given litigation finance exposure
- Debt-to-equity ratio of 2.90x with declining equity base increases solvency risk
- Revenue decline of 24.3% YoY combined with -1.6B operating loss signals fundamental business failure
Key Metrics to Watch
- Quarterly cash balance and monthly cash burn rate
- Operating cash flow stabilization or continued deterioration
- Debt covenant compliance and refinancing ability
- Portfolio valuations and realized vs. unrealized losses
- Stockholders equity erosion trajectory
Financial Metrics
Revenue
-1.7B
Net Income
-1.6B
EPS (Diluted)
$-7.46
Free Cash Flow
-136.7M
Total Assets
4.3B
Cash
702.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
91.3%
Net Margin
94.9%
ROE
-197.1%
ROA
-38.2%
FCF Margin
7.9%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
2.90x
Debt/Assets
64.5%
Interest Coverage
-32.85x
Long-term Debt
2.4B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T08:43:44.452004 |
Data as of: 2026-03-31 |
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