Houlihan Lokey (HLI) AI Stock Analysis

• Market Cap: $9.70B
• Dividend Yield: 1.33%
• Average Volume (3M): 577.53K
• Price to Earnings (P/E): 24.9
• Beta (1Y): 0.99
• Revenue Growth: 20.99%
• EPS Growth: 25.02%
• Country: US
• Employees: 2,601
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 1.94
• Shares Outstanding: 54,450,590
• 10 Day Avg. Volume: 641,602
• 30 Day Avg. Volume: 577,526
• PEG Ratio: 0.67
• Price to Book (P/B): 4.88
• Price to Sales (P/S): 4.44
• P/FCF Ratio: 13.12
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 3.64
• Enterprise Value/Gross Profit: 6.75
• Enterprise Value/Ebitda: 14.43
• 1Y Price Target: $200.50
• Price Target Upside: 44.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 7.88
• Revenue Forecast (FY): $2.71B

• Rating: 64 Neutral
• Price Target: $149.00 ▲(7.23% Upside)
• Action: Downgraded Date: 02/04/26
• Date: Action: Downgraded 02/04/26

The score is driven primarily by solid underlying financial performance and a constructive earnings-call outlook (growth, improving deal visibility, strong liquidity/capital deployment). These positives are tempered by notably weak technical momentum (below major moving averages with negative MACD) and a relatively premium valuation with only a modest dividend yield.

Positive Factors

Strong profitability & ROE

Sustained high margins and ~20% ROE indicate durable fee pricing power and efficient capital use. This profit base supports reinvestment, hiring and returns to shareholders, and provides a buffer through cycles, underpinning long-term cash generation and strategic flexibility.

Healthy liquidity and capital flexibility

A ~$1.2B cash position and active, prioritized capital deployment (acquisitions then buybacks) gives durable optionality to pursue strategic tuck-ins, invest in talent and weather downturns without urgent financing, strengthening long-term growth and resilience.

Leading market position & European expansion

Top global rankings and targeted European acquisitions expand cross-border advisory capabilities and sponsor relationships, deepening market share and fee pipeline. This durable franchise advantage supports repeat business and scalability in higher-margin advisory services.

Negative Factors

Rising leverage

Debt-to-equity roughly doubled year-over-year, signaling greater financial leverage. While still moderate, higher debt raises interest and refinancing risk, constrains flexibility for large bolt-on M&A or buybacks in tighter markets, and increases sensitivity to cash-flow variability.

Revenue cyclicality & restructuring risk

Restructuring is countercyclical and corporate finance remains deal-driven; as markets normalize restructuring demand may decline and M&A visibility can fluctuate. This structural cyclicality produces uneven revenue and margin trajectories, complicating medium-term forecasting and staffing.

Rising compensation and integration costs

Absolute compensation and non-comp expense growth, plus acquisition-related integration costs, press operating leverage. If new hires or acquisitions don't scale revenue quickly, elevated expense baselines could compress margins and reduce the durability of current profitability.

Houlihan Lokey Business Overview & Revenue Model

Company Description

Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), capital market, financial restructuring, and financial and valuation advisory services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy-side and sell-side transactions, leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, as well as advise financial sponsors on various transactions. The Financial Restructuring segment advises debtors, creditors, and other parties-in-interest related to recapitalization/deleveraging transactions. It also provides a range of advisory services, including structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The Financial and Valuation Advisory segment offers valuations of various assets, such as companies, illiquid debt and equity securities, and intellectual property. It also provides fairness opinions in connection with M&A and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations; and other types of financial opinions. In addition, this segment offers dispute resolution services. It serves corporations, institutions, and governments. The company was incorporated in 1972 and is headquartered in Los Angeles, California with offices in the United States, Europe, the Middle East, and the Asia-Pacific region.

How the Company Makes Money

Houlihan Lokey primarily makes money by earning fees for advisory services, with revenue largely driven by successfully completed client engagements and, in many cases, transaction outcomes. 1) Corporate Finance (transaction advisory fees) - M&A advisory fees: The firm earns success-based fees when it advises on the sale, purchase, merger, or divestiture of a business. These fees are typically contingent on deal completion and are often larger than upfront retainers. - Capital markets / financing advisory: The firm earns fees for advising clients on raising capital (debt and/or equity) or refinancing, including placement/structuring advisory. Fees may include retainers plus completion-based components tied to the closing of a financing. - Financial sponsor coverage: Advising private equity and other sponsors on acquisitions, exits, and financings generates similar transaction-driven fees. 2) Financial Restructuring (restructuring and liability management fees) - Restructuring advisory: The firm earns fees for advising companies, creditor groups, and other parties on out-of-court restructurings, liability management transactions, and in-court processes such as Chapter 11. Engagements often include monthly retainers and additional fees tied to milestones, court-approved fee processes (in certain bankruptcy cases), and/or success-based outcomes. - Countercyclical demand: This segment can contribute meaningfully during periods of market stress when defaults rise and clients seek balance-sheet restructuring. 3) Financial and Valuation Advisory (valuation and opinions fees) - Valuation services: The firm earns project-based fees for valuing businesses, securities, illiquid assets, and complex instruments for purposes such as financial reporting, tax, fairness considerations, and transactions. - Opinions and advisory reports: The firm earns fees for fairness opinions, solvency opinions, and other advisory analyses often required in M&A, financing, and restructuring contexts. - These revenues are generally more recurring/engagement-based than pure transaction success fees, though volumes can still be influenced by broader market activity. Additional factors influencing earnings - Deal volume and market conditions: Corporate Finance revenue tends to be sensitive to M&A and financing activity levels, while Restructuring can be stronger in downturns. - Fee mix (retainers vs. success fees): A portion of revenue may come from retainers and ongoing advisory work, but a meaningful share is typically realized upon successful completion of transactions or restructuring outcomes. - Client relationships and repeat business: Revenue is supported by repeat engagements with corporates, financial sponsors, and creditor constituencies. Significant partnerships or specific revenue-sharing arrangements: null

Houlihan Lokey Financial Statement Overview

Summary

Solid profitability (TTM net margin ~17%, EBIT margin ~23%) and strong ROE (~20%) support a high-quality profile. Offsets include uneven, cyclical revenue history, a notable increase in leverage (debt-to-equity ~0.43 vs. ~0.20 prior period), and some variability in cash-flow conversion with slightly negative TTM free-cash-flow growth.

Income Statement

HLI shows solid profitability with TTM (Trailing-Twelve-Months) net margin around 17% and healthy operating profitability (EBIT margin ~23%). Revenue has re-accelerated in TTM (Trailing-Twelve-Months) with strong growth versus the most recent annual period, and margins have generally improved from 2023–2024 levels. The main offset is cyclicality: revenue growth has been uneven over the last several years (including a down year in 2023), and margins remain below the peak levels seen in 2021–2022.

Balance Sheet

The balance sheet looks sound with moderate leverage and strong profitability on equity. TTM (Trailing-Twelve-Months) debt-to-equity is ~0.43, higher than the prior annual period (~0.20), indicating increased reliance on debt, but still not excessive for the business. Equity has grown over time and return on equity remains strong (about 20% TTM (Trailing-Twelve-Months)), though below the very high levels achieved in 2022.

Cash Flow

Cash generation is strong with TTM (Trailing-Twelve-Months) free cash flow close to net income (free cash flow to net income ~0.96), suggesting earnings quality is solid. However, free cash flow growth is slightly negative in TTM (Trailing-Twelve-Months), and cash conversion has been somewhat variable across years (notably weaker operating cash flow relative to earnings in 2023–2024), which reduces confidence in consistency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.65B	2.39B	1.91B	1.81B	2.27B	1.53B
Gross Profit	1.43B	919.92M	737.05M	696.64M	861.32M	554.26M
EBITDA	667.85M	597.59M	427.63M	435.03M	661.40M	423.38M
Net Income	447.78M	399.71M	280.30M	254.22M	437.75M	312.77M
Balance Sheet
Total Assets	3.94B	3.82B	3.17B	2.97B	2.89B	2.43B
Cash, Cash Equivalents and Short-Term Investments	1.18B	1.14B	728.80M	720.69M	833.70M	846.85M
Total Debt	994.26M	438.19M	415.41M	374.87M	197.63M	175.33M
Total Liabilities	1.64B	1.64B	1.33B	1.36B	1.44B	1.04B
Stockholders Equity	2.29B	2.17B	1.84B	1.61B	1.44B	1.38B
Cash Flow
Free Cash Flow	738.94M	808.91M	261.73M	85.54M	727.92M	565.69M
Operating Cash Flow	769.48M	848.61M	328.46M	136.27M	736.60M	579.84M
Investing Cash Flow	-54.57M	-265.06M	-70.41M	-3.00M	-273.91M	-99.75M
Financing Cash Flow	-491.25M	-329.07M	-250.59M	-240.46M	-459.06M	-26.82M

Houlihan Lokey Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 138.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLI, the sentiment is Negative. The current price of 138.95 is below the 20-day moving average (MA) of 153.17, below the 50-day MA of 166.84, and below the 200-day MA of 181.55, indicating a bearish trend. The MACD of -8.30 indicates Positive momentum. The RSI at 20.93 is Positive, neither overbought nor oversold. The STOCH value of 8.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLI.

Houlihan Lokey Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PIPR	72 Outperform	$5.27B	20.11	21.69%	1.63%	12.77%	36.43%
MC	71 Outperform	$4.31B	22.13	44.30%	3.69%	51.19%	456.59%
EVR	70 Outperform	$10.89B	16.14	33.81%	0.95%	27.00%	63.47%
SF	69 Neutral	$10.88B	12.55	11.96%	1.43%	7.54%	2.73%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HLI	64 Neutral	$9.70B	24.90	20.14%	1.33%	20.99%	25.02%
JEF	56 Neutral	$7.89B	17.25	6.84%	2.52%	-5.41%	25.28%

Houlihan Lokey Corporate Events

Houlihan Lokey Files Prospectus Supplement for Share Resales

On February 25, 2026, Houlihan Lokey filed a prospectus supplement with the SEC covering the potential resale of up to 4,009 Class A shares issuable upon conversion of Class B shares previously granted to former members of Waller Helms Advisors after they met post-closing performance targets on January 20, 2026. The filing also covers the possible resale of some or all of 28,412 Class A shares issuable upon conversion of Class B shares held by former owners of 7 Mile Advisors, issued following the December 2023 acquisition and subsequent attainment of performance milestones in December 2025 and January 2026, clarifying the legal status of these shares without itself constituting an offer to sell the securities.

The most recent analyst rating on (HLI) stock is a Hold with a $176.00 price target. To see the full list of analyst forecasts on Houlihan Lokey stock, see the HLI Stock Forecast page.

Houlihan Lokey announces planned director board departure

On January 24, 2026, Houlihan Lokey, Inc. announced that director Robert A. Schriesheim, who has served on the company’s board since July 2015, notified the firm that he will not stand for reelection when his current term ends at the 2027 Annual Meeting of Shareholders. His planned departure signals an upcoming change in the company’s board composition in 2027, which may open the door for new leadership perspectives and governance adjustments as the firm prepares for its next phase of strategic oversight.

The most recent analyst rating on (HLI) stock is a Buy with a $201.00 price target. To see the full list of analyst forecasts on Houlihan Lokey stock, see the HLI Stock Forecast page.

Houlihan Lokey Amends and Restates Class B Voting Trust

On December 30, 2025, Houlihan Lokey, Inc. entered into an amended and restated voting trust agreement that replaces its prior 2015 voting trust structure governing Class B common stock. The revised agreement updates termination triggers, including ending the trust 10 years after the date on which all Class B shares convert into Class A or once the trust’s holdings fall below 5% of outstanding common stock, and introduces a requirement that any trust-held stake above 30% of the company’s outstanding shares after that conversion be voted proportionally with other shareholders. It also broadens employee flexibility by allowing former employees (no longer employed for at least 12 months) to have their shares released from the trust after the final conversion date and by expanding circumstances under which employees can withdraw shares for certain pledging, hedging, monetization, or similar transactions, subject to the company’s insider trading policy. Because some directors serve as trustees and hold Class B shares subject to the trust, a special committee of disinterested directors was formed to review and negotiate the new agreement, and, after consulting independent advisors and management, the committee unanimously approved the amended and restated voting trust agreement and authorized officers to execute it, clarifying governance and voting mechanics for major shareholders and employees.

The most recent analyst rating on (HLI) stock is a Buy with a $228.00 price target. To see the full list of analyst forecasts on Houlihan Lokey stock, see the HLI Stock Forecast page.