| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 29.79 | 91 |
| Intrinsic value (DCF) | 3.68 | -76 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1356.73 | 8597 |
B. Riley Financial, Inc. (NASDAQ: RILYZ) 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, institutional investors, and high-net-worth individuals. Its Capital Markets segment provides investment banking, corporate finance, and trading services, while Wealth Management delivers brokerage and investment advisory solutions. 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 holds strategic investments in communications and consumer brands, including Targus. Operating in the competitive investment banking and financial services sector, B. Riley differentiates itself through a multi-faceted business model that combines advisory, asset management, and opportunistic investments. Despite recent financial challenges, the firm remains a notable player in middle-market advisory and restructuring services.
B. Riley Financial presents a mixed investment case. The company operates in a highly competitive financial services landscape, with diversified revenue streams across capital markets, wealth management, and consulting. However, FY 2023 saw a net loss of $99.9 million and negative diluted EPS (-$3.69), raising concerns about profitability. While the firm maintains a strong cash position ($231.96M) and generates positive operating cash flow ($24.5M), its high total debt ($2.45B) is a significant risk. The 5.25% Senior Notes due 2028 may appeal to fixed-income investors seeking yield, but equity investors should weigh the company’s restructuring capabilities against its financial instability. Market conditions, including interest rate volatility and M&A activity, will heavily influence future performance.
B. Riley Financial competes in a fragmented financial services market, distinguishing itself through a hybrid model combining investment banking, restructuring advisory, and asset management. Its competitive advantage lies in its specialized restructuring and liquidation services, where it competes with boutique advisory firms. The Capital Markets segment faces stiff competition from larger investment banks, while Wealth Management contends with established brokerages. The firm’s ability to cross-sell services across segments provides some insulation, but its smaller scale limits its reach compared to bulge-bracket banks. B. Riley’s opportunistic investments in distressed assets and brands (e.g., Targus) add a unique dimension, though these carry higher risk. The company’s restructuring expertise is a key differentiator, but reliance on cyclical advisory revenue and high leverage pose structural challenges. Its beta of 0.056 suggests low correlation with broader markets, which may appeal to risk-averse investors but also indicates limited growth momentum.