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Abacus Life Sets New Standards on NASDAQ with Remarkable Growth

Impressive Financial Performance

On March 21st, Abacus Life (NASDAQ: ABL) reported an impressive 79.6millioninfull−yearrevenue,reflectinga1479.6 million in full-year revenue, reflecting a 14% increase from the previous year. The company’s adjusted EBITDA for the same period was \(39.3 million, marking a 13% year-over-year growth. I purchased shares in November when the price was below 7, and with the stock now at (12, Abacus Life faces new challenges ahead.

Key Business Developments

Abacus Life has introduced two significant initiatives for 2024 to fuel its growth:

  • Launch of the 40 Act Fund (ABL Wealth): Abacus is awaiting SEC approval for this groundbreaking fund, which has faced review delays. The fund aims to provide greater liquidity and access to capital in Abacus’s target markets, generating brokerage commissions on policies integrated into the fund.
  • ABL Tech Advancements: Abacus is promoting the sale of its data services to adjacent markets such as pension funds and financial services, leveraging their extensive longevity data spanning several decades.

Both initiatives are expected to incur minimal additional costs, with Abacus anticipating margin improvements as the benefits start to reflect in their financial statements.

Capital Restructuring Efforts

Abacus Life has implemented several changes to its capital structure following its deSPAC transition:

  • December 12th: Authorized a new issuance structure, details pending.
  • February 12th: Executed a strategic move to reduce their cost of capital, trading above par.
  • March 21st: Filed updates revealing that public warrant holders have started exercising, with 305k warrants exercised and $3.5 million received before the filing.

This aligns with Abacus’s strategic focus on reinvesting capital, with around 200millionaccessiblethroughpubliclytradedwarrantspricedat200 million accessible through publicly traded warrants priced at 11.50/share. Abacus has opted for a conservative approach with their common shares, avoiding a dilutive secondary offering post-deSPAC.

Future Prospects and Risks

A recent analysis highlighted a valuation approach similar to peer specialty insurance businesses trading at over 20x EPS, potentially justifying Abacus’s current valuation. The potential upside lies in Abacus gaining increased access to their warrant cash, enabling more capital deployment at an impressive ~20% Return on Invested Capital (ROIC). Such growth prospects could effectively double ABL’s earnings capacity, supporting their share price.

However, Abacus faces several risks, including substantial non-cash and one-time expenses related to their public listing, regulatory challenges, and valuation transparency issues typical of specialty finance firms. The company’s track record of regulatory compliance provides some assurance, but the stock remains susceptible to volatility with approximately 1 million shares in float. Increased warrant exercises are expected to bolster liquidity.


Abacus Life stands out in the life settlement industry, distinguishing itself from underperforming peers and reclaiming values exceeding their $10 IPO price. The company’s focus on tangible business outcomes, robust returns on capital, and promising growth prospects position Abacus favorably for continued success. Investors should remain cautious of potential volatility, with returns heavily dependent on the effective execution of ABL’s growth strategy.

By adopting a strategic and innovative approach, Abacus Life continues to set new standards in the life settlement industry, underscoring their commitment to growth and shareholder value.