Heritage Global (HGBL) AI Stock Analysis

• Market Cap: $42.73M
• Dividend Yield: N/A
• Average Volume (3M): 111.66K
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.12
• Revenue Growth: 0.02%
• EPS Growth: -68.55%
• Country: US
• Employees: 86
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 0.01
• Shares Outstanding: 34,741,554
• 10 Day Avg. Volume: 122,391
• 30 Day Avg. Volume: 111,657
• PEG Ratio: -0.42
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.85
• P/FCF Ratio: -18.51
• Enterprise Value/Market Cap: 0.56
• Enterprise Value/Revenue: 0.47
• Enterprise Value/Gross Profit: 0.55
• Enterprise Value/Ebitda: 3.53
• 1Y Price Target: $3.50
• Price Target Upside: 186.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.17
• Revenue Forecast (FY): $54.85M

• Rating: 61 Neutral
• Price Target: $1.50 ▲(22.95% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is driven mainly by solid financial stability from very low leverage, tempered by inconsistent earnings quality and cash-flow volatility (including negative 2025 free cash flow). Technicals are a notable drag with the stock trading below major moving averages and weak momentum, while valuation appears reasonable and the earnings-call outlook is cautiously constructive due to DebtX accretion potential and improving deal flow expectations.

Positive Factors

Balance Sheet Health

Extremely low leverage (debt-to-equity ~0.02) provides durable financial flexibility, reducing refinancing and interest-rate risk. This conservative capital structure supports opportunistic M&A, a repurchase authorization, and investment in operations despite uneven earnings, cushioning cyclical downturns.

Strategic M&A - DebtX

DebtX brings specialist loan-sale advisory, valuation capabilities and proprietary market data, materially deepening Financial Assets' service set. Retaining DebtX management and expected accretion in 2026 creates a more recurring fee base and cross-sell opportunities with institutional clients, strengthening long-term revenue mix.

Operational Capacity Expansion

The purpose-built 18,000 sq ft HQ and modernized warehouse consolidates operations, boosts auction and logistics capacity, and standardizes processes. This structural investment should support sustainable volume growth, lower unit costs, and better client service, improving operational scalability over multiple quarters.

Negative Factors

Cash Generation Volatility

Free cash flow turning negative in 2025, with operating cash covering less than half of net income in 2024–25, signals inconsistent cash conversion. That undermines the firm's ability to self‑fund growth, sustain buybacks or absorb shocks, increasing reliance on cash reserves or external funding during weak deal cycles.

Revenue & Margin Volatility

The business is transaction-driven and lumpy: strong years (2022–23), a sharp 2024 decline, then a rebound in 2025 with materially compressed net margins. That pattern reduces earnings predictability, weakens ROI visibility, and makes long-term planning and consistent capital allocation more difficult for management.

Capital & Asset Quality Pressures

A dramatic equity decline (to $7.0M from $65.2M), alongside ~$18.9M of expired NOLs and management warnings of elevated consumer delinquencies and expected charge-offs, materially weaken the capital cushion. These tax expirations and asset‑quality risks impair earnings durability and raise solvency sensitivity to future losses.

Heritage Global Business Overview & Revenue Model

Company Description

Heritage Global, Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company provides market making, acquisitions, dispositions, valuations, and secured lending services. It focuses on identifying, valuing, acquiring, and monetizing underlying tangible and intangible assets. Heritage Global Inc. acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; accounts receivable portfolios; intellectual property; and business enterprises. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was incorporated in 1983 and is headquartered in San Diego, California.

How the Company Makes Money

Heritage Global generally makes money by providing asset disposition services and earning fees tied to the sale of client assets. Key revenue streams typically include: (1) commissions and service fees earned for conducting auctions and negotiated sales (often structured as a percentage of gross proceeds and/or fixed service charges for marketing, cataloging, and sale administration); (2) fees for valuation, advisory, and other engagement services that support asset monetization efforts; and (3) revenue generated when it purchases assets or inventory for its own account (or takes title as part of a transaction structure) and later resells them at a higher price, capturing the spread between acquisition cost and resale proceeds. Additional factors that can contribute to earnings include the volume and timing of industrial liquidation activity (e.g., plant closures and restructurings), the mix of commission-only versus principal (inventory/owned-asset) transactions, and relationships with corporate clients and intermediaries that refer surplus or distressed assets into Heritage Global’s sale channels.

Heritage Global Financial Statement Overview

Summary

Strong, low-leverage balance sheet (very low debt-to-equity and solid capital flexibility) is a clear positive, but operating results and cash flow are uneven. Revenue and margins have been volatile, profitability has compressed versus 2022–2023 levels, and free cash flow turned negative in 2025 with weaker cash conversion.

Income Statement

Revenue has been volatile, with strong growth in 2022–2023, a sharp decline in 2024, and a meaningful rebound in 2025 (annual revenue up ~218%). Profitability has also compressed materially from 2022–2023 levels: net margin fell from ~33% (2022) and ~21% (2023) to ~11% (2024) and ~7% (2025). While 2025 shows very high gross margin, operating profitability appears weaker versus prior years, suggesting less consistent earnings power and a more cyclical/transaction-driven profile.

Balance Sheet

The balance sheet looks conservatively financed with very low leverage: debt-to-equity has trended down to ~0.02 in 2025 (from ~0.16 in 2023), providing strong flexibility and lower financial risk. Equity has grown over time, supporting a solid capital base. The main offset is profitability on equity has come down meaningfully from peak levels (ROE ~32% in 2020–2022 and ~20% in 2023 to ~5% in 2025), indicating returns are currently less efficient even though leverage is minimal.

Cash Flow

Cash generation has been inconsistent. Operating cash flow is positive in most years but was negative in 2021, and the cash conversion versus earnings is modest recently (operating cash flow covering less than half of net income in 2024–2025). Most notably, free cash flow swung from strongly positive in 2022–2024 to negative in 2025, which increases uncertainty around the durability of cash returns and reinvestment capacity.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	50.98M	45.36M	60.55M	46.91M	25.79M
Gross Profit	43.02M	14.21M	21.39M	10.39M	11.01M
EBITDA	6.75M	10.31M	14.83M	11.66M	3.47M
Net Income	3.59M	5.18M	12.47M	15.49M	3.05M
Balance Sheet
Total Assets	88.44M	81.31M	83.17M	67.56M	50.46M
Cash, Cash Equivalents and Short-Term Investments	20.52M	21.75M	12.28M	12.67M	13.62M
Total Debt	5.72M	2.71M	9.88M	7.15M	6.58M
Total Liabilities	21.46M	16.11M	22.09M	19.26M	17.82M
Stockholders Equity	66.98M	65.20M	61.08M	48.30M	32.64M
Cash Flow
Free Cash Flow	-2.33M	7.61M	12.76M	6.27M	-4.06M
Operating Cash Flow	6.14M	7.75M	13.02M	6.48M	-2.63M
Investing Cash Flow	-9.39M	10.87M	-15.87M	-7.52M	-10.20M
Financing Cash Flow	2.03M	-9.15M	2.46M	78.00K	3.06M

Heritage Global Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HGBL, the sentiment is Neutral. The current price of 1.22 is below the 20-day moving average (MA) of 1.26, below the 50-day MA of 1.32, and below the 200-day MA of 1.64, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 43.61 is Neutral, neither overbought nor oversold. The STOCH value of 40.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HGBL.

Heritage Global Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WHG	70 Outperform	$145.49M	20.36	5.77%	3.32%	4.03%	151.19%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HGBL	61 Neutral	$42.73M	12.04	5.42%	―	0.02%	-68.55%
DOMH	61 Neutral	$47.69M	0.22	116.21%	―	―	―
GREE	45 Neutral	$19.91M	3.72	―	―	-3.52%	83.39%
ARBK	39 Underperform	$7.73M	-0.41	―	―	-13.86%	-32.19%

Heritage Global Corporate Events

Heritage Global Expands Financial Assets Division with DebtX Acquisition

On January 9, 2026, Heritage Global’s newly formed subsidiary Heritage DebtX LLC closed an all-cash acquisition, effective January 1, 2026, of substantially all assets and certain liabilities of The Debt Exchange, Inc. (DebtX) for approximately $8.5 million, using cash on hand. DebtX, a long-established full-service loan sale advisor and valuation platform, brings loan-portfolio advisory and valuation services, proprietary market transaction data, and end-to-end execution support for banks, specialty finance companies, government agencies and institutional investors, significantly bolstering Heritage Global’s Financial Assets division and deepening its presence in the secondary loan market. DebtX will continue to be managed by its existing senior leadership team through Heritage DebtX and will ultimately be led by co-founder Bruce Hounsell, who has entered into a multi-year employment agreement that includes an initial consultancy period, subsequent promotion from Co-President to President of Heritage DebtX, a base salary, performance-based bonus, stock options and a commission and revenue-sharing arrangement related to his MaisieDog LLC relationships, aligning management incentives with the growth of the acquired business.

The most recent analyst rating on (HGBL) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Heritage Global stock, see the HGBL Stock Forecast page.