Heritage Global (HGBL) AI Stock Analysis

• Market Cap: $50.38M
• Dividend Yield: N/A
• Average Volume (3M): 111.66K
• Price to Earnings (P/E): 14.7
• 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): 0.02
• Shares Outstanding: 34,741,554
• 10 Day Avg. Volume: 122,391
• 30 Day Avg. Volume: 111,657
• PEG Ratio: -0.22
• Price to Book (P/B): 1.05
• Price to Sales (P/S): 1.51
• P/FCF Ratio: 9.00
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 3.97
• Enterprise Value/Ebitda: 6.38
• 1Y Price Target: $3.53
• Price Target Upside: 171.54% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 58 Neutral
• Price Target: $1.50 ▲(15.38% Upside)

Heritage Global's overall stock score is primarily impacted by its mixed financial performance and bearish technical indicators. While the company maintains a strong balance sheet and reasonable valuation, operational inefficiencies and negative cash flows are significant concerns. The earnings call provided some positive insights, but economic uncertainties and declining profitability weigh on the outlook.

Positive Factors

Strong Balance Sheet

A strong balance sheet with increased equity and cash reserves provides financial stability and flexibility for strategic investments and growth.

Industrial Assets Division Growth

Growth in the Industrial Assets division indicates successful operations and potential for sustained revenue increases in this segment.

M&A Strategy Advancement

Advancing M&A strategy can drive long-term growth and shareholder value through strategic acquisitions and market expansion.

Negative Factors

Decline in Profit Margins

A significant decline in profit margins suggests increased cost pressures, which could impact long-term profitability if not addressed.

Cash Flow Challenges

Severe decline in free cash flow indicates potential liquidity issues, affecting the company's ability to invest in growth and meet obligations.

Reduced Net Income

Reduced net income reflects challenges in maintaining profitability, which could hinder future investment and expansion opportunities.

Heritage Global Business Overview & Revenue Model

Company Description

Heritage Global Inc. (HGBL) is a diversified asset management and auction company based in the United States. The company specializes in providing services related to the acquisition, disposition, and valuation of industrial assets and surplus inventory across various sectors, including manufacturing, real estate, and financial services. HGBL operates through multiple divisions, offering auction services, asset advisory, and liquidation solutions to a wide range of clients, including corporations, government agencies, and financial institutions.

How the Company Makes Money

Heritage Global generates revenue primarily through its auction services, asset management, and advisory services. The company earns fees from conducting auctions, commissions on sales, and service fees for asset valuations. Key revenue streams include the sale of industrial equipment, real estate assets, and surplus inventory. Additionally, HGBL may engage in partnerships with financial institutions and other organizations to provide specialized asset management services, which further enhances its revenue opportunities. The company's ability to leverage technology in its auction processes and its extensive network of industry contacts also contribute to its financial success.

Heritage Global Financial Statement Overview

Summary

Heritage Global shows a mixed financial performance with strong balance sheet stability but declining income statement margins and cash flow challenges. The low debt-to-equity ratio is a positive, but operational inefficiencies and negative cash flows are concerning.

Income Statement

Heritage Global's income statement shows a mixed performance. The TTM gross profit margin of 65.18% is strong, but it has decreased from the previous year's 87.20%. The net profit margin has also declined to 6.18% from 11.42% in the previous year. Revenue growth is positive at 1.94% TTM, recovering from a decline in the previous year. However, EBIT and EBITDA margins have decreased significantly, indicating potential challenges in operational efficiency.

Balance Sheet

The balance sheet of Heritage Global is relatively strong with a low debt-to-equity ratio of 0.027, indicating low leverage and financial stability. The return on equity is moderate at 4.69% TTM, down from 7.95% the previous year, suggesting a decrease in profitability. The equity ratio remains healthy, reflecting a solid capital structure.

Cash Flow

Cash flow analysis reveals concerns, with negative operating cash flow and free cash flow in the TTM period. The free cash flow growth rate is significantly negative, indicating cash flow challenges. The operating cash flow to net income ratio is negative, suggesting inefficiencies in converting income to cash. However, the free cash flow to net income ratio remains relatively strong at 74.59%, indicating some resilience.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	49.89M	45.36M	60.55M	46.91M	25.79M	26.18M
Gross Profit	16.85M	14.21M	21.39M	10.39M	11.01M	10.33M
EBITDA	10.49M	10.31M	14.83M	11.66M	3.47M	6.42M
Net Income	3.08M	5.18M	12.47M	15.49M	3.05M	9.66M
Balance Sheet
Total Assets	86.51M	81.31M	83.17M	67.56M	50.46M	44.55M
Cash, Cash Equivalents and Short-Term Investments	19.43M	21.75M	12.28M	12.67M	13.62M	23.39M
Total Debt	1.80M	2.71M	9.88M	7.15M	6.58M	1.00M
Total Liabilities	20.01M	16.11M	22.09M	19.26M	17.82M	14.61M
Stockholders Equity	66.50M	65.20M	61.08M	48.30M	32.64M	29.94M
Cash Flow
Free Cash Flow	-769.00K	7.61M	12.76M	6.27M	-4.06M	9.14M
Operating Cash Flow	-1.03M	7.75M	13.02M	6.48M	-2.63M	9.15M
Investing Cash Flow	-6.93M	10.87M	-15.87M	-7.52M	-10.20M	4.51M
Financing Cash Flow	743.00K	-9.15M	2.46M	78.00K	3.06M	7.00M

Heritage Global Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HGBL, the sentiment is Negative. The current price of 1.3 is below the 20-day moving average (MA) of 1.48, below the 50-day MA of 1.65, and below the 200-day MA of 2.00, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 25.62 is Positive, neither overbought nor oversold. The STOCH value of 32.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HGBL.

Heritage Global Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WHG	69 Neutral	$157.87M	20.50	5.99%	3.69%	4.03%	151.19%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HGBL	58 Neutral	$50.38M	14.66	5.45%	―	0.02%	-68.55%
GREE	41 Neutral	$25.55M	-1.04	―	―	-18.74%	39.95%
ARBK	37 Underperform	$20.54M	-0.35	―	―	-13.86%	-32.19%

Heritage Global Corporate Events

Heritage Global Reports Mixed Q3 2025 Financial Results

Heritage Global Inc., a diversified financial services company, specializes in providing capital and financial asset solutions, including auction and appraisal services, asset disposition sales, and specialty financing solutions. In its latest earnings report for the quarter ending September 30, 2025, Heritage Global reported total revenues of $11.36 million, marking an increase from $10.41 million in the same quarter of the previous year. The company’s net income for the quarter was $585,000, a decrease from $1.09 million in the prior year, reflecting challenges in maintaining profit margins. Key financial metrics revealed that while asset sales revenue increased significantly, services revenue saw a decline. The company also reported a decrease in cash and cash equivalents, down to $19.43 million from $21.75 million at the end of 2024. Heritage Global’s strategic focus remains on expanding its Specialty Lending segment, despite facing concentration risks with its largest borrower, which is currently in default. Looking ahead, Heritage Global’s management remains cautiously optimistic, with plans to diversify its portfolio and mitigate concentration risks, while continuing to leverage its expertise in the financial asset solutions market.

Heritage Global’s Mixed Earnings Call: Growth Amid Challenges

The recent earnings call for Heritage Global presented a mixed sentiment, reflecting both positive strides and areas of concern. The company exceeded its Net Operating Income (NOI) goal and demonstrated a strong pipeline across revenue sectors, yet it faced declines in operating income, net income, and adjusted EBITDA compared to the previous year. Despite these challenges, the company remains optimistic about future growth through acquisitions and client base expansion.

Heritage Global Inc. Reports Q2 2025 Earnings Growth

Heritage Global Inc., a company specializing in auction and appraisal services, asset disposition sales, and specialty financing solutions, operates in the financial services sector with a diverse portfolio of subsidiaries. In its latest earnings report for the second quarter of 2025, Heritage Global Inc. reported a total revenue increase to $14.3 million, up from $12.0 million in the same period last year, driven by growth in both services and asset sales revenue.