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Heritage Global Inc (HGBL)
NASDAQ:HGBL
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Heritage Global
(NASDAQ:HGBL)
Rating:56Neutral
Price Target:
$2.00
▲(5.82% Upside)
Positive Factors
Financial Performance
HGBL reported results that beat consensus on all metrics, showing improved performance after a slow start.
Market Valuation
HGBL shares trade at a lower P/E multiple compared to its closest competitor, suggesting potential undervaluation.
Negative Factors
Auction Performance
Heritage's fourth quarter saw a repeat of previous misses, driven by low activity in the Industrial Asset business.
Earnings Miss
HGBL missed consensus on revenue, adjusted EBITDA, and EPS due to an unusually weak quarter in auctioning industrial assets.
Heritage Global (HGBL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$65.66M
Dividend YieldN/A
Average Volume (3M)39.91K
Price to Earnings (P/E)19.1
Beta (1Y)0.14
Revenue Growth-11.05%
EPS Growth-66.83%
CountryUS
Employees86
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)0.05
Shares Outstanding34,741,554
10 Day Avg. Volume35,607
30 Day Avg. Volume39,907
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit2.47
Enterprise Value/Ebitda9.20
Forecast
1Y Price Target
$3.53Price Target Upside86.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Heritage Global Business Overview & Revenue Model
Company DescriptionHeritage Global Inc. (HGBL) is a diversified financial services company specializing in asset liquidation, valuation, and advisory services. The company operates across various sectors, including industrial, financial, and technology, providing solutions for distressed and surplus assets. Its core services include asset auctions, valuations, and advisory services aimed at maximizing the value recovery for its clients.
How the Company Makes MoneyHeritage Global Inc. generates revenue through a multi-faceted business model centered around its asset liquidation and valuation services. The company earns money primarily through commission-based fees from conducting auctions and liquidations of surplus and distressed assets. These auctions can involve industrial machinery, real estate, and other valuable assets. Additionally, HGBL offers valuation and advisory services, which provide a stable revenue stream through consulting fees. The company also forms strategic partnerships with financial institutions and corporations to facilitate asset recovery and disposition, further enhancing its revenue potential. Overall, HGBL's earnings are driven by its expertise in maximizing asset value for its clients and its ability to navigate various sectors and markets.
Heritage Global Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were significant achievements such as surpassing NOI goals, a strong financial assets pipeline, and strategic acquisition plans, there were also notable challenges including a decrease in operating income, EBITDA, and net income compared to the previous year.Q2-2025 Updates
Positive Updates
Exceeded Net Operating Income (NOI) Goal
Heritage Global exceeded its $2 million NOI goal by achieving $2.2 million, which was seen as encouraging and indicative of a solid quarter.
Strong Pipeline and Client Growth in Financial Assets
NLEX, the financial assets division, has built a strong and trusted brand, continuing to add new and bulk sellers regularly, with a strong pipeline of opportunities expected to sustain performance throughout 2025.
Strategic Acquisition Plan
Heritage Global is in a serious acquisition mode, looking at multiple companies, with plans to announce deals within 6 to 12 months, aiming for significant growth.
Positive Industrial Sector Performance
The industrial assets division saw a healthy spread of large multinational firms aggressively managing their surplus, with an increase in auctions and steady asset pricing levels.
Negative Updates
Decrease in Operating Income Compared to Previous Year
Consolidated operating income was $2.2 million in Q2 2025 compared to $3.5 million in Q2 2024, a decrease attributed to earnings from a significant transaction in the prior year.
Reduction in Adjusted EBITDA and Net Income
Adjusted EBITDA decreased to $2.6 million from $4 million in the prior year period, and net income fell to $1.6 million from $2.5 million, influenced by past significant transactions.
Company Guidance
During the Heritage Global Inc. Second Quarter 2025 Earnings Call, the company highlighted its financial performance and strategic direction. Net operating income (NOI) surpassed the $2 million goal, reaching $2.2 million, while consolidated operating income was reported at $2.2 million compared to $3.5 million in the previous year. The Industrial Assets division posted an operating income of $1.3 million, and the Financial Assets division also recorded $2.2 million in operating income. Adjusted EBITDA stood at $2.6 million, with net income at $1.6 million or $0.05 per diluted share. The company emphasized its robust pipeline across revenue sectors, plans for strategic acquisitions, and a strong balance sheet, with stockholders' equity at $65.7 million and a net available cash balance of $11.7 million. Heritage Global is actively pursuing M&A opportunities, aiming to announce significant deals within the next 6 to 12 months. The call concluded with management expressing confidence in the company's stability and growth potential.Heritage Global Financial Statement Overview
Summary
Heritage Global presents a mixed financial outlook. While profitability and operational efficiency are commendable, the sharp decline in revenue and free cash flow raises concerns. The company maintains a strong balance sheet with low leverage, but there is a notable decrease in return on equity, which could impact future growth potential.Income Statement
The income statement shows a robust performance with a Gross Profit Margin of 87.2% and a Net Profit Margin of 11.4% for 2024, indicating strong profitability. However, there is a decline in Total Revenue from 2023 to 2024 by 25.1%, which is a significant concern. EBIT and EBITDA margins remain healthy at 20.0% and 20.9% respectively, showcasing operational efficiency.80
Positive
Balance Sheet
The balance sheet reflects a strong Equity Ratio of 80.2%, demonstrating financial stability. The Debt-to-Equity Ratio is low at 0.04, indicating minimal leverage. Return on Equity has decreased to 7.9% in 2024 from 20.4% in 2023, suggesting reduced profitability on equity.75
Positive
Cash Flow
The cash flow statement illustrates a 40.4% decline in Free Cash Flow from 2023 to 2024, which is a downside. Nevertheless, the Operating Cash Flow to Net Income Ratio is 1.5, highlighting efficient cash generation relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 48.94M | 45.36M | 60.55M | 46.91M | 25.79M | 26.18M |
| Gross Profit | 27.11M | 39.56M | 21.39M | 26.00M | 17.90M | 16.71M |
| EBITDA | 7.28M | 10.31M | 14.83M | 11.66M | 3.47M | 6.42M |
| Net Income | 3.59M | 5.18M | 12.47M | 15.49M | 3.05M | 9.66M |
Balance Sheet | ||||||
| Total Assets | 87.69M | 81.31M | 83.17M | 67.56M | 50.46M | 44.55M |
| Cash, Cash Equivalents and Short-Term Investments | 19.85M | 21.75M | 12.28M | 12.67M | 13.62M | 23.39M |
| Total Debt | 7.26M | 2.71M | 9.88M | 7.15M | 6.58M | 1.00M |
| Total Liabilities | 21.98M | 16.11M | 22.09M | 19.26M | 17.82M | 14.61M |
| Stockholders Equity | 65.71M | 65.20M | 61.08M | 48.30M | 32.64M | 29.94M |
Cash Flow | ||||||
| Free Cash Flow | -4.89M | 7.61M | 12.76M | 6.27M | -4.06M | 9.14M |
| Operating Cash Flow | 10.12M | 7.75M | 13.02M | 6.48M | -2.63M | 9.15M |
| Investing Cash Flow | -772.00K | 10.87M | -15.87M | -7.52M | -10.20M | 4.51M |
| Financing Cash Flow | -6.03M | -9.15M | 2.46M | 78.00K | 3.06M | 7.00M |
Heritage Global Technical Analysis
Negative
1.89
Price Trends
2.08
Negative
2.08
Negative
2.04
Negative
Market Momentum
-0.05
Negative
38.66
Neutral
28.28
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 1.89 is below the 20-day moving average (MA) of 1.92, below the 50-day MA of 2.08, and below the 200-day MA of 2.04, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 38.66 is Neutral, neither overbought nor oversold. The STOCH value of 28.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HGBL.
Heritage Global Risk Analysis
Heritage Global disclosed 28 risk factors in its most recent earnings report. Heritage Global reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Heritage Global Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $17.80B | 11.94 | 10.22% | 3.74% | 9.69% | 1.17% | |
65 Neutral | $24.65M | 10.90 | 4.55% | 8.33% | 69.61% | -55.71% | |
62 Neutral | $101.47M | 10.57 | 11.37% | ― | 9.24% | -2.06% | |
56 Neutral | $65.66M | 19.11 | 5.45% | ― | -11.05% | -66.83% | |
54 Neutral | $239.65M | ― | 77.58% | ― | -3.35% | 99.18% | |
50 Neutral | $35.77M | 5.02 | 17.60% | ― | 138.36% | ― | |
49 Neutral | $80.78M | ― | -6.66% | 4.77% | -36.67% | -1568.10% |
* Financial Sector Average
Performance Comparison
HGBL
Heritage Global
1.88
0.22
13.25%
COHN
Cohen & Company
12.00
3.86
47.42%
SRL
Scully Royalty
5.25
-1.86
-26.16%
SIEB
Siebert Financial
2.51
0.53
26.77%
BTM
Bitcoin Depot
3.70
2.14
137.18%
MDBH
MDB Capital Holdings, LLC Class A
3.50
-4.21
-54.60%
Heritage Global Corporate Events
Executive/Board ChangesShareholder Meetings
Heritage Global Elects Directors at Annual Meeting
Neutral
Jun 9, 2025
On June 4, 2025, Heritage Global Inc. held its 2025 Annual Meeting of Shareholders where shareholders elected Samuel Shimer, Kelly Sharpe, and Ross Dove as Class I directors. Additionally, UHY LLP was ratified as the independent auditor for the fiscal year ending December 31, 2025. The election and ratification reflect the company’s ongoing governance and financial oversight strategies.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.