| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 34.61 | 39 |
| Intrinsic value (DCF) | 8.49 | -66 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1356.73 | 5336 |
B. Riley Financial, Inc. (NASDAQ: RILYK) is a diversified financial services firm offering capital markets, wealth management, financial consulting, auction and liquidation, communications, and consumer-focused solutions. Headquartered in Los Angeles, California, the company serves public and private firms with investment banking, corporate finance, research, and advisory services. Its Capital Markets segment caters to institutional and high-net-worth clients, while its Wealth Management division provides retail brokerage and investment services. The Financial Consulting segment specializes in restructuring, forensic accounting, and valuation services, while the Auction and Liquidation segment focuses on retail liquidation. B. Riley also operates in communications and consumer markets through strategic acquisitions like Targus. With a market cap of approximately $91.5 million, B. Riley Financial operates in a competitive financial services landscape, leveraging its diversified business model to navigate market fluctuations. The company's 5.50% Senior Notes due 2026 reflect its capital structure strategy amid evolving financial conditions.
B. Riley Financial presents a mixed investment profile. The company's diversified financial services model provides revenue stability across multiple segments, including capital markets and wealth management. However, FY 2023 results show a net loss of $99.9 million and negative diluted EPS of -$3.69, raising concerns about profitability. The firm maintains a strong cash position ($232 million) but carries significant total debt ($2.45 billion), which could pressure liquidity. The 5.50% Senior Notes due 2026 offer fixed-income appeal, but investors should weigh the high debt load against the company's ability to generate consistent cash flow. The negative beta (-0.034) suggests low correlation with broader markets, potentially offering portfolio diversification benefits. Dividend investors may find the $1.375 per share payout attractive, but sustainability depends on improved earnings. Overall, B. Riley Financial suits investors comfortable with financial services sector volatility and seeking exposure to a multi-faceted advisory and capital markets business.
B. Riley Financial competes in a fragmented financial services industry, differentiating itself through a diversified business model spanning capital markets, consulting, and liquidation services. Its competitive advantage lies in its integrated approach, combining investment banking, restructuring expertise, and retail liquidation under one umbrella. The Capital Markets segment competes with boutique investment banks, leveraging its research and advisory capabilities. The Wealth Management division faces stiff competition from larger brokerages but benefits from cross-selling opportunities with other B. Riley services. The Financial Consulting segment holds an edge in specialized restructuring and forensic accounting, appealing to distressed firms. However, the company's high debt levels and recent net losses weaken its competitive positioning against better-capitalized rivals. Its Auction and Liquidation segment competes with asset recovery firms, while the Communications and Consumer segments face sector-specific challenges. B. Riley's ability to acquire and integrate businesses (e.g., Targus) provides growth avenues but also introduces execution risks. The firm's negative beta indicates it may not follow traditional financial sector trends, offering a unique risk-return profile. Long-term competitiveness hinges on debt management, segment profitability, and strategic acquisitions in high-margin advisory services.