Value
9.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Fwd P/E | 9.9 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 5.7x
- ▸PEG: 0.05
- ▸Attractively valued
BUR · Why this verdict
Why Burford Capital (BUR) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
BUR carries a striking 94% analyst upside estimate and a reward-to-risk ratio near 7-to-1, but the business falls below minimum quality thresholds with negative free cash flow, a Piotroski F-Score of 3 out of 9, and a market capitalization below the investable universe floor, making it uninvestable at this stage.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is negative, the Piotroski F-Score is 3 out of 9, and the business is described as lacking a competitive moat, indicating the company has not demonstrated the financial quality needed to justify a position. Quality breakdown | Quality recovers when free cash flow turns positive and the Piotroski F-Score rises above 6 for 2 consecutive reporting periods. | →Stable |
| CounterLitigation-finance businesses deploy capital into long-duration assets and can run negative accounting free cash flow during investment cycles even when the underlying portfolio is generating returns; the low F-Score may reflect the model's mismatch with the asset-type rather than genuine deterioration. | ||
At a forward P/E of 6.2x and a PEG of 0.06, analysts see approximately 94% upside to consensus targets, and the implied reward-to-risk of roughly 7-to-1 is mathematically attractive if the business stabilizes. Valuation breakdown | Over 12 months, the share price closes more than 50% of the gap to the analyst consensus target of $7.55 as earnings predictability improves. | →Stable |
| CounterA forward P/E of 6.2x on a litigation-finance business with an average earnings surprise of -33% over four quarters suggests analysts have repeatedly overestimated earnings power; the cheap multiple may be a value trap rather than a genuine discount. | ||
The earnings track record shows two misses and two beats over four quarters, with the average surprise at -33% — driven by a -143% and a -129% miss in the two middle quarters — making forward earnings estimates unreliable. Earnings | If execution improves, earnings beats in 3 of the next 4 quarters with average surprise above 10% would signal the business has stabilized. | →Stable |
| CounterThe most recent quarter delivered a 130% beat versus a deeply negative estimate, suggesting that when the litigation portfolio realizes gains, the upside surprise can be dramatic and the miss cadence may reflect lumpy income rather than fundamental deterioration. | ||
The market capitalization at approximately $0.98 billion falls below the minimum threshold for the investable universe, introducing liquidity and institutional ownership constraints that limit the ability to build or exit a meaningful position. Warnings | If the market cap concern resolves, the capitalization rises and sustains above $1.0 billion for 3 consecutive months. | →Stable |
| CounterSmaller-cap names can offer outsized returns precisely because institutional constraints depress valuations below intrinsic value; the below-floor market cap is the mechanism that creates the 94% upside gap. | ||
Free cash flow is negative, the Piotroski F-Score is 3 out of 9, and the business is described as lacking a competitive moat, indicating the company has not demonstrated the financial quality needed to justify a position.
→StableQuality breakdown
- Expectation
- Quality recovers when free cash flow turns positive and the Piotroski F-Score rises above 6 for 2 consecutive reporting periods.
CounterLitigation-finance businesses deploy capital into long-duration assets and can run negative accounting free cash flow during investment cycles even when the underlying portfolio is generating returns; the low F-Score may reflect the model's mismatch with the asset-type rather than genuine deterioration.
At a forward P/E of 6.2x and a PEG of 0.06, analysts see approximately 94% upside to consensus targets, and the implied reward-to-risk of roughly 7-to-1 is mathematically attractive if the business stabilizes.
→StableValuation breakdown
- Expectation
- Over 12 months, the share price closes more than 50% of the gap to the analyst consensus target of $7.55 as earnings predictability improves.
CounterA forward P/E of 6.2x on a litigation-finance business with an average earnings surprise of -33% over four quarters suggests analysts have repeatedly overestimated earnings power; the cheap multiple may be a value trap rather than a genuine discount.
The earnings track record shows two misses and two beats over four quarters, with the average surprise at -33% — driven by a -143% and a -129% miss in the two middle quarters — making forward earnings estimates unreliable.
→StableEarnings
- Expectation
- If execution improves, earnings beats in 3 of the next 4 quarters with average surprise above 10% would signal the business has stabilized.
CounterThe most recent quarter delivered a 130% beat versus a deeply negative estimate, suggesting that when the litigation portfolio realizes gains, the upside surprise can be dramatic and the miss cadence may reflect lumpy income rather than fundamental deterioration.
The market capitalization at approximately $0.98 billion falls below the minimum threshold for the investable universe, introducing liquidity and institutional ownership constraints that limit the ability to build or exit a meaningful position.
→StableWarnings
- Expectation
- If the market cap concern resolves, the capitalization rises and sustains above $1.0 billion for 3 consecutive months.
CounterSmaller-cap names can offer outsized returns precisely because institutional constraints depress valuations below intrinsic value; the below-floor market cap is the mechanism that creates the 94% upside gap.
Per-dimension breakdown
Quality
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 3.2 |
| Piotroski F | 3.3 |
- ▸Cash-burning (FCF negative)
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
- ▸Quality concerns
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| EPS growth | 10.0 |
Momentum
2.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.9 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 1.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -13.9%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 10.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 111%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 0.0 |
| growth rank | 5.0 |
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.9 |
| support resistance | 9.1 |
| 52w position | 0.0 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 6.8 |
| volatility | 0.0 |
| put call | 10.0 |
| max pain risk | 3.0 |
| beta | 6.8 |
| debt equity | 3.8 |
- ▸Above max pain $2
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 6.5 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 300.0%
How the verdict was assembled
Engine trigger
Market cap $0.91B below $1B minimum. Not in investable universe.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- ASYMMETRY:8.2>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.3<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
8.24
Upside
+83.6%
Downside
10.1%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $0.9B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.3<4.5.
The strongest dimensions are Growth at 10.0, Value at 9.6, and Sentiment at 6.6; the weakest are Momentum at 2.3, Quality at 2.4, and Peer rank at 2.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 8.24 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1At a forward P/E of 6.2x and a PEG of 0.06, analysts see approximately 94% upside to consensus targets, and the implied reward-to-risk of roughly 7-to-1 is mathematically attractive if the business stabilizes.
Trip ifShare price rises above $7.55, reaching the analyst consensus target.
- P2Free cash flow is negative, the Piotroski F-Score is 3 out of 9, and the business is described as lacking a competitive moat, indicating the company has not demonstrated the financial quality needed to justify a position.
Trip ifFree cash flow turns positive and Piotroski F-Score rises above 6 for 2 consecutive reporting periods.
- P3The earnings track record shows two misses and two beats over four quarters, with the average surprise at -33% — driven by a -143% and a -129% miss in the two middle quarters — making forward earnings estimates unreliable.
Trip ifAverage earnings surprise rises above 10% over any rolling 4-quarter window.
- P4The market capitalization at approximately $0.98 billion falls below the minimum threshold for the investable universe, introducing liquidity and institutional ownership constraints that limit the ability to build or exit a meaningful position.
Trip ifMarket capitalization sustains above $1.0 billion for 3 consecutive months.