Heritage Global (HGBL) AI Stock Analysis

• Market Cap: $80.07M
• Dividend Yield: N/A
• Average Volume (3M): 61.84K
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.22
• Revenue Growth: -16.82%
• EPS Growth: -60.79%
• Country: US
• Employees: 86
• Sector: Financial
• Sector Strength: 78
• Industry: Financial - Capital Markets
• EPS (TTM): 0.03
• Shares Outstanding: 35,275,204
• 10 Day Avg. Volume: 65,886
• 30 Day Avg. Volume: 61,841
• PEG Ratio: 0.94
• Price to Book (P/B): 2.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 41.43
• Enterprise Value/Market Cap: 0.34
• Enterprise Value/Revenue: 0.13
• Enterprise Value/Gross Profit: 2.38
• Enterprise Value/Ebitda: 0.63
• 1Y Price Target: $4.25
• Price Target Upside: 87.22% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: $2.50 ▲(10.13%Upside)

Heritage Global's stock score reflects its mixed financial performance, with strengths in profitability and operational efficiency overshadowed by concerns over declining revenue and free cash flow. The technical analysis presents a neutral to slightly bearish outlook, while the valuation indicates a fair price compared to peers. The earnings call suggests cautious optimism for future growth despite current challenges.

Positive Factors

Financial Performance

HGBL shares trade at a lower P/E multiple compared to a comparable company, suggesting potential undervaluation.

Financial Stability

HGBL maintains a strong balance sheet with $21.7M in cash, no debt, and is cash flow positive, reducing the need to raise equity.

Growth Outlook

Management expects sustained annual growth due to existing conditions and macroeconomic tailwinds.

Negative Factors

Auction Activity

Management missed expectations for a pickup in Q4, as some large high-profile auctions failed to launch.

Earnings Performance

HGBL missed consensus on revenue, adjusted EBITDA, and EPS due to an unusually weak quarter in auctioning industrial assets.

Gross Profit Margin

Earnings misses resulted from a weak quarter in brokering charged-off loans, leading to a drop in gross profit margin.

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 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 Financial Statement Overview

Summary

Heritage Global shows strong profitability and operational efficiency, with high Gross and Net Profit Margins. However, concerns arise from declining Total Revenue and Free Cash Flow, alongside a reduced Return on Equity, indicating potential challenges in future growth.

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.

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.

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	45.36M	60.55M	46.91M	25.79M	26.18M
Gross Profit	30.64M	21.39M	26.00M	11.01M	10.33M
EBITDA	10.31M	14.83M	11.66M	3.47M	6.42M
Net Income	5.18M	12.47M	15.49M	3.05M	9.66M
Balance Sheet
Total Assets	81.31M	83.17M	67.56M	50.46M	44.55M
Cash, Cash Equivalents and Short-Term Investments	21.75M	12.28M	12.67M	13.62M	23.39M
Total Debt	2.71M	9.88M	7.15M	6.58M	1.00M
Total Liabilities	16.11M	22.09M	19.26M	17.82M	14.61M
Stockholders Equity	65.20M	61.08M	48.30M	32.64M	29.94M
Cash Flow
Free Cash Flow	7.61M	12.76M	6.27M	-4.06M	9.14M
Operating Cash Flow	7.75M	13.02M	6.48M	-2.63M	9.15M
Investing Cash Flow	10.87M	-15.87M	-7.52M	-10.20M	4.51M
Financing Cash Flow	-9.15M	2.46M	78.00K	3.06M	7.00M

Heritage Global Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HGBL, the sentiment is Positive. The current price of 2.27 is above the 20-day moving average (MA) of 2.12, above the 50-day MA of 2.09, and above the 200-day MA of 1.94, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 65.27 is Neutral, neither overbought nor oversold. The STOCH value of 95.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HGBL.

Heritage Global Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIEB	73 Outperform	$195.58M	10.62	21.85%	―	21.85%	111.42%
HGBL	70 Outperform	$80.07M	18.76	6.92%	―	-16.82%	-60.79%
Sector *	67 Neutral	$16.66B	11.44	9.71%	3.91%	11.61%	-10.70%
COHN	61 Neutral	$266.89M	2.31	-4.25%	10.14%	38.41%	-222.98%
BTM	60 Neutral	$326.06M	―	77.58%	―	-9.72%	66.64%
MDBH	57 Neutral	$41.30M	3.83	24.43%	―	8.75%	―
SRL	46 Neutral	$89.47M	―	-6.66%	4.31%	-36.67%	-1568.10%

Heritage Global Corporate Events

Heritage Global Elects Directors at Annual Meeting

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.

The most recent analyst rating on (HGBL) stock is a Buy with a $3.50 price target. To see the full list of analyst forecasts on Heritage Global stock, see the HGBL Stock Forecast page.