| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 31.12 | 31 |
| Intrinsic value (DCF) | 5.01 | -79 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1356.73 | 5620 |
B. Riley Financial, Inc. (NASDAQ: RILYN) 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 investments. Headquartered in Los Angeles, California, the company serves public and private firms, institutional investors, and high-net-worth individuals. With a market capitalization of approximately $106.6 million, B. Riley operates across multiple segments, providing investment banking, corporate finance, restructuring advisory, and retail liquidation services. The firm also owns consumer brands like Targus and maintains a strategic portfolio of communications investments. Founded in 1973, B. Riley has positioned itself as a flexible financial partner, leveraging its expertise in distressed asset management and value-driven acquisitions. Despite recent financial challenges, including a net loss of $99.9 million in FY 2023, the company continues to generate revenue ($1.64 billion) and maintains a dividend yield of 1.625 per share. Its diversified business model allows it to navigate cyclical market conditions while capitalizing on niche opportunities in restructuring and liquidation.
B. Riley Financial presents a high-risk, high-reward investment case. The company operates in a fragmented financial services market, with strengths in restructuring, liquidation, and advisory services—areas that could see increased demand in economic downturns. However, its FY 2023 net loss of $99.9 million and negative EPS (-$3.69) raise concerns about profitability. The firm’s high total debt ($2.45 billion) relative to cash reserves ($232 million) further amplifies financial risk. On the positive side, B. Riley maintains a diversified revenue base ($1.64 billion in FY 2023) and generates positive operating cash flow ($24.5 million), suggesting underlying operational resilience. The dividend yield (1.625 per share) may appeal to income-focused investors, but sustainability remains questionable given the current financial strain. Investors should weigh the firm’s expertise in distressed asset management against its leveraged balance sheet and cyclical exposure.
B. Riley Financial competes in a crowded financial services landscape, differentiating itself through a multi-segment approach that combines capital markets, restructuring advisory, and liquidation services. Its competitive advantage lies in its ability to provide integrated solutions—such as pairing investment banking with turnaround consulting—which appeals to distressed firms and special situations investors. The firm’s auction and liquidation segment (via Great American Group) gives it an edge in retail asset recovery, a niche with high barriers to entry. However, B. Riley lacks the scale of bulge-bracket investment banks and faces stiff competition from specialized restructuring advisors (e.g., Houlihan Lokey) and diversified financial conglomerates (e.g., Jefferies). Its wealth management division is relatively small compared to wirehouses like Morgan Stanley, limiting fee-based revenue stability. The company’s recent acquisitions (e.g., Targus) diversify revenue but also introduce execution risk. While B. Riley’s beta (0.053) suggests low correlation with broader markets—a potential hedge—its high debt load could constrain growth during tightening credit conditions. Long-term success hinges on leveraging its restructuring expertise while improving profitability in core segments.