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1. Company Snapshot

1.a. Company Description

B.Riley Financial, Inc., through its subsidiaries, provides investment banking and financial services to corporate, institutional, and high net worth clients in North America, Australia, and Europe.The company operates in six segments: Capital Markets, Wealth Management, Auction and Liquidation, Financial Consulting, Principal Investments–Communications, and Brands.


The Capital Markets segments offers investment banking, corporate finance, financial advisory, research, securities lending and sales, and trading services; merger and acquisitions, restructuring advisory, initial and secondary public offerings, and institutional private placements services; asset management services; and trades in equity securities.The Wealth Management segment provides wealth management and tax services.The Auction and Liquidation Segment offers retail store liquidation, and wholesale and industrial assets disposition services.


The Financial Consulting segment provides bankruptcy, forensic accounting, litigation support, operations management and real estate consulting, and valuation and appraisal services.The Principal Investments–Communications segment provides consumer Internet access through United Online under the NetZero and Juno brands; VoIP communication and related products, and subscription services through magicJack; and mobile phone services and devices through Marconi Wireless.The Brands segments provides licensing of a brand investment portfolio, including Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too, and Nanette Lepore.


It also offers advisory services; brokerage services; senior secured and second lien secured loans to middle market public and the private U.S. companies; and consulting services.The company was formerly known as Great American Group, Inc.and changed its name to B.


Riley Financial, Inc.in November 2014.The company was founded in 1973 and is headquartered in Los Angeles, California.

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1.b. Last Insights on RILY

B. Riley Financial's recent performance was negatively impacted by regulatory issues, including a delinquency notification from Nasdaq due to delayed filing of its Form 10-Q for the period ended June 30, 2025. The company received a Staff Determination Letter and will seek a hearing to maintain its listing. Additionally, B. Riley Financial announced a name change to BRC Group Holdings, Inc., effective January 1, 2026. The company also hired BDO USA for its 2025 audit, potentially indicating issues with its previous auditor. These developments may raise concerns about the company's governance and financial reporting.

1.c. Company Highlights

2. B. Riley Financial Delivers Mixed Q4 2024 Results Amid Strategic Overhaul

B. Riley Financial reported a mixed bag of financial performance for Q4 2024, reflecting both the challenges and progress in its strategic transformation. The company posted net income of $48 million to $68 million, primarily driven by $236 million to $247 million from discontinued operations. However, this was offset by a net loss from continuing operations of $178 million to $187 million, which was heavily impacted by goodwill impairments and trading losses. Operating adjusted EBITDA came in at $12 million to $14 million, a modest figure that underscores the company's ongoing struggles in achieving profitability. Cash and restricted cash stood at $257 million, while total debt remained elevated at $1.78 billion, though net debt declined by $221 million from Q3, suggesting progress in deleveraging efforts. Management's focus on core businesses—B. Riley Securities (BRS), Wealth Management, and Advisory Services—remains a key theme, with plans to invest in growth and improve profitability.

Publication Date: Mar -08

📋 Highlights
  • Joint Venture with Oaktree Capital Management: B. Riley Financial formed a joint venture with Oaktree Capital Management for Great American Group, generating $203 million in cash and retaining a 44% stake. This partnership already secured a $2 billion JOANN liquidation deal, with B. Riley investing $30 million and anticipating strong returns.
  • Asset Monetization Progress: The company sold Atlantic Coast Recycling for $70 million, recognizing a $30 million gain, and sold a portion of its W-2 Wealth Management business to Stifel for approximately $26 million as part of its asset monetization strategy.
  • Debt Reduction and New Credit Facility: B. Riley fully redeemed its February 2025 senior notes and secured a new $160 million senior secured credit facility with Oaktree, improving financial flexibility and reducing net debt by $221 million from Q3.
  • Withdrawal of Bryant Riley's Take-Private Proposal: Bryant Riley withdrew his proposal to take the company private, citing the company's recovery potential and the need to address debt maturities as a public entity.
  • Q4 Financial Highlights and Strategic Focus: The company reported net income of $48 million to $68 million, driven by $236 million to $247 million from discontinued operations, while continuing operations incurred a net loss due to goodwill impairments and trading losses. Management expressed optimism about core businesses, including BRS, Wealth Management, and Advisory Services, and plans to invest in growth and improve profitability.

Strategic Initiatives and Asset Monetization

B. Riley Financial made significant strides in its strategic initiatives during the quarter. The joint venture with Oaktree Capital Management for Great American Group yielded $203 million in cash while retaining a 44% stake. This partnership has already borne fruit, with the successful $2 billion JOANN liquidation deal, where B. Riley invested $30 million and anticipates strong returns. Additionally, the company monetized non-core assets, including the sale of Atlantic Coast Recycling for $70 million (resulting in a $30 million gain) and a portion of its W-2 Wealth Management business to Stifel for approximately $26 million. These moves not only bolstered the balance sheet but also allowed the company to focus on its core competencies. As Bryant Riley noted, "Further asset monetization will focus on non-core assets, though the company can now be more selective."

Financial Highlights and Outlook

Despite the progress, B. Riley Financial faces lingering challenges. The withdrawal of Bryant Riley's take-private proposal highlights the company's focus on addressing debt maturities as a public entity. The decision to redeem senior notes and secure a new $160 million senior secured credit facility with Oaktree improves financial flexibility but also underscores the debt burden. Looking ahead, the company aims to leverage its core businesses, with management expressing optimism about their recovery and growth potential. However, the lack of specific EBITDA targets leaves some uncertainty. The company expects to file its 10-K by March 17, potentially seeking a 15-day extension if needed.

Valuation and Outlook

From a valuation perspective, B. Riley Financial's Price-to-Sales Ratio (P/S) of 0.14 suggests a discounted valuation relative to its peers, reflecting the market's cautious stance on its turnaround efforts. The Dividend Yield of 21.19% is unusually high, indicating either a distressed valuation or a commitment to returning capital to shareholders. However, the negative Price-to-Book (P/B) ratio of -0.29 raises concerns about asset impairments and the company's ability to realize book value. With net debt-to-EBITDA of 0.26, the company's leverage remains manageable, but the focus will be on sustaining debt reduction while reigniting growth in its core businesses. While the fourth quarter marked a strategic turning point, B. Riley Financial's path to recovery remains uncertain, with execution and debt management as key catalysts for shareholder value.

3. NewsRoom

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B. Riley Receives Expected Nasdaq Delinquency Notification; Anticipates Meeting New Filing Deadlines

Nov -28

Source: prnewswire.com

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B. Riley Financial Reports First Quarter 2025 Results

Nov -18

Source: prnewswire.com

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B. Riley Financial Announces Corporate Name Change to BRC Group Holdings, Inc.

Nov -11

Source: prnewswire.com

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B. Riley Financial Receives Nasdaq Staff Determination Letter; Will Seek Hearing & Continued Listing

Oct -06

Source: prnewswire.com

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B. Riley Financial Hires BDO USA for 2025 Audit

Sep -09

Source: prnewswire.com

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B. Riley Financial Announces Notification of Delinquency with Nasdaq

Aug -22

Source: prnewswire.com

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B. Riley Financial, Inc. (RILY) Business Update Call

Aug -13

Source: seekingalpha.com

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B. Riley Financial Shares Preliminary Fourth Quarter and Full Year 2024 Results and Financial Estimates and Business Update for First Half 2025

Aug -13

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.89%)

6. Segments

Capital Markets

Expected Growth: 10.5%

Growing demand for investment banking, research, and trading services among corporate and institutional clients, driven by increasing complexity in financial markets and regulatory requirements, is expected to drive growth in B. Riley Financial's Capital Markets segment.

Communications

Expected Growth: 12.3%

Growing demand for investor relations, public relations, and corporate communications drives growth in Communications from B. Riley Financial, Inc. Strong brand reputation, strategic acquisitions, and increasing adoption of digital communication platforms contribute to the segment's growth.

Consumer

Expected Growth: 10.2%

The consumer segment is expected to grow driven by increasing demand for digital payment solutions, rising adoption of online lending platforms, and growing need for credit services among consumers.

Wealth Management

Expected Growth: 7.1%

Growing demand for comprehensive financial planning, increasing adoption of digital wealth management platforms, and rising high net worth individuals are driving the growth of the wealth management segment.

Financial Consulting

Expected Growth: 8.5%

Growing demand for strategic advisory services, increasing M&A activities, and rising need for restructuring and capital raising solutions drive growth in B. Riley Financial's Financial Consulting segment.

Auction and Liquidation

Expected Growth: 8.5%

Growing demand for asset recovery and valuation services, increasing distressed asset volumes, and expansion into new markets drive growth in the auction and liquidation segment.

All Other

Expected Growth: 4.5%

The 'All Other' segment of B. Riley Financial, Inc. is expected to grow driven by increasing investment activities, expansion of corporate functions, and diversification of business operations, leading to a forecasted CAGR of 4.5%.

7. Detailed Products

Investment Banking

B. Riley Financial, Inc. provides investment banking services, including mergers and acquisitions, equity and debt capital markets, and restructuring advisory services.

Wealth Management

B. Riley Financial, Inc. offers wealth management services, including investment advice, portfolio management, and financial planning.

Auctions and Liquidation

B. Riley Financial, Inc. provides auction and liquidation services, helping clients to dispose of assets and recover value.

Valuation and Appraisal

B. Riley Financial, Inc. offers valuation and appraisal services, providing independent opinions of value for businesses, assets, and securities.

Principal Investments

B. Riley Financial, Inc. makes principal investments in companies and assets, providing capital and strategic guidance.

Lending and Financing

B. Riley Financial, Inc. provides lending and financing solutions, including factoring, asset-based lending, and equipment financing.

8. B. Riley Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for B. Riley Financial, Inc. is medium due to the presence of alternative financial services providers, but the company's diversified business model and strong brand reputation mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for B. Riley Financial, Inc. due to the company's strong relationships with its clients and the customized nature of its financial services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for B. Riley Financial, Inc. due to the company's dependence on a few key suppliers for its financial services, but the company's strong financial position and diversified business model mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for B. Riley Financial, Inc. due to the high barriers to entry in the financial services industry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high for B. Riley Financial, Inc. due to the competitive nature of the financial services industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 94.35%
Debt Cost 4.71%
Equity Weight 5.65%
Equity Cost 10.57%
WACC 5.04%
Leverage 1670.63%

11. Quality Control: B. Riley Financial, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 4.8/10

Value: 8.2

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Quality: 4.9

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.85$

Current Price

3.85$

Potential

-0.00%

Expected Cash-Flows