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By Rayk Riechmann
Binah Capital Group, Inc. (Nasdaq: BCG) reported an in-line quarter of top-line growth, driven by a surge in its assets under management (AUM).
BCG’s revenue grew by 2%, backed by increased profitability as gross margins reached a multi-year high of 21%.
A major highlight is an 11% increase in AUM that shows an impressive ability to scale BCG’s business model. By recruiting and retaining high-performing financial advisors from traditional wirehouses, regionals, and IBDs, BCG should capture a greater client wallet share over time.
Turning to valuation, BCG trades at a 65% discount to its own trailing price-to-sales multiple and a 90% discount to a basket of peers, suggesting a significant rerating may be on the horizon. Precedent transactions similarly suggest upside potential with a average AUM multiple of 0.79%. Applying this to BCG’s AUM of $27.8 billion, we see a potential valuation of $219 million or $13.20/share — far above the current share price of $2.10/share.
Check out the full earnings report below.
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