| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 31.00 | 35 |
| Intrinsic value (DCF) | 4.89 | -79 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1356.73 | 5814 |
B. Riley Financial, Inc. (NASDAQ: RILYG) is a diversified financial services firm offering a broad range of solutions, including capital markets, wealth management, financial consulting, auction and liquidation, communications, and consumer services. Headquartered in Los Angeles, California, the company serves public and private firms, institutional investors, and high-net-worth individuals. B. Riley Financial operates through multiple segments, providing investment banking, corporate finance, research, and retail brokerage services. Its Financial Consulting segment specializes in bankruptcy, restructuring, and forensic accounting, while its Auction and Liquidation segment focuses on retail liquidation. The company also holds strategic investments in communications and consumer brands, including Targus. With a market cap of approximately $90.5 million, B. Riley Financial plays a key role in the financial services sector, particularly in advisory and restructuring niches. Despite recent financial challenges, including a net loss in 2023, the firm maintains a strong presence in specialized financial services.
B. Riley Financial's 5.00% Senior Notes due 2026 (RILYG) present a high-yield fixed-income opportunity, but investors should weigh the risks carefully. The company reported a net loss of $99.9 million in FY 2023, with diluted EPS at -$3.69, reflecting operational challenges. However, its diversified business model and strong cash position ($231.96 million) provide some stability. The notes offer a 5.00% yield, which may appeal to income-focused investors, but the high total debt ($2.45 billion) raises concerns about leverage. The negative beta (-0.055) suggests low correlation with broader markets, potentially offering portfolio diversification benefits. Investors should monitor restructuring performance and liquidity trends closely.
B. Riley Financial competes in a fragmented financial services landscape, differentiating itself through specialized advisory services, particularly in restructuring and liquidation. Its Capital Markets segment competes with boutique investment banks, while its Wealth Management division faces competition from larger brokerages. The Financial Consulting segment holds an edge in bankruptcy and forensic accounting, where scale and expertise matter. However, the company's high debt load and recent losses weaken its competitive position against better-capitalized peers. Its Auction and Liquidation business benefits from industry consolidation but faces margin pressure from digital disruptors. B. Riley's diversified model provides cross-selling opportunities but also exposes it to cyclical risks across multiple segments. The firm's ability to integrate acquisitions (e.g., Targus) and monetize non-core assets will be critical in improving profitability and reducing leverage.