Houlihan Lokey Inc. (HLI)
NYSE:HLI
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Houlihan Lokey
(NYSE:HLI)
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Rating:73Outperform
Price Target:
$169.00
â–²(4.00% Upside)
Action:Upgraded
Date:05/23/26
The score is driven primarily by strong financial fundamentals (low leverage, strong ROE, solid profitability) and a positive earnings-call outlook (record results, strong pipeline, shareholder returns). Offsetting factors are a mixed technical backdrop (below longer-term moving averages with negative MACD) and a valuation that is reasonable but not clearly discounted for cyclicality.
Positive Factors
Conservative balance sheet
Low leverage and steadily expanding equity provide durable financial flexibility. Manageable debt-to-equity (~0.20–0.23) and consistently strong ROE mean the firm can fund hires, tuck-in M&A, buybacks, and dividends without compromising solvency across cycles.
Negative Factors
Cyclical revenue and cashflow volatility
Advisory fees are inherently cyclical; uneven multi-year revenue and free cash flow patterns complicate forecasting and capital allocation. Persistent volatility can produce cash-flow shortfalls and force procyclical cuts to hiring or returns in weaker periods.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet
Low leverage and steadily expanding equity provide durable financial flexibility. Manageable debt-to-equity (~0.20–0.23) and consistently strong ROE mean the firm can fund hires, tuck-in M&A, buybacks, and dividends without compromising solvency across cycles.
Read all positive factors
Houlihan Lokey (HLI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.57B
Dividend Yield1.33%
Average Volume (3M)701.14K
Price to Earnings (P/E)22.5
Beta (1Y)1.02
Revenue Growth9.48%
EPS Growth5.23%
CountryUS
Employees2,601
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)6.39
Shares Outstanding54,450,590
10 Day Avg. Volume704,498
30 Day Avg. Volume701,143
Financial Highlights & Ratios
PEG Ratio4.27
Price to Book (P/B)4.08
Price to Sales (P/S)3.65
P/FCF Ratio14.02
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue3.76
Enterprise Value/Gross Profit7.25
Enterprise Value/Ebitda15.07
Forecast
1Y Price Target
$176.00Price Target Upside8.31% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)8.16
Revenue Forecast (FY)$2.95B
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, Financi...
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 ...
Houlihan Lokey Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
Overall, the call conveys a positive long-term outlook anchored by record annual revenue and EPS, strong backlog and pipeline, robust hiring and promotions, balance sheet strength and an improved restructuring outlook. Near-term challenges include quarter-to-quarter volatility driven by geopolitical events and software-sector disruption, modest declines in FR transaction volumes and average fees, and rising non-compensation expenses. Management expects many of the headwinds to be temporary and highlighted investments in technology/AI and a diversified global platform as offsets.Positive Updates
Record Annual Revenue and Earnings
Houlihan Lokey reported record fiscal year 2026 revenue of $2.6 billion, up 10% year-over-year, and adjusted EPS of $7.56, up 20% year-over-year.
Negative Updates
Financial Restructuring Quarterly Volume Decline
Financial Restructuring closed 30 transactions in the quarter, down 21% versus the same quarter last year; average transaction fees in FR decreased in the quarter and two larger FR transactions extended beyond the quarter end, impacting Q4 results.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Annual Revenue and Earnings
Houlihan Lokey reported record fiscal year 2026 revenue of $2.6 billion, up 10% year-over-year, and adjusted EPS of $7.56, up 20% year-over-year.
Read all positive updates
Company Guidance
Management guided that fiscal 2027 should see continued growth in Corporate Finance and Financial & Valuation Advisory and Financial Restructuring "at elevated levels" (FR closed FY26 with $529M revenue, -3% YoY; Q4 FR was $110M), after reporting FY26 revenue of $2.6B (+10% YoY) and adjusted EPS of $7.56 (+20%), with Q4 revenue $636M and adjusted EPS $1.63; they emphasized record backlog/pipeline and a record number of MDs. On cost and tax metrics, they will target a long‑term adjusted compensation expense ratio of 61.5% (Q4 adjusted comp $391M vs $410M prior), expect adjusted non‑comp expenses to grow at a pace similar to FY26 (Q4 non‑comp $94M, +10.5% YoY; FY26 adjusted non‑comp ratio 13.9%), and noted FY26 adjusted effective tax rate was 23.7% (vs 29.8% in FY25) with Q1 FY27 tax rate likely to benefit from May share vesting (roughly half of Q4’s adjusted effective tax rate). They closed the quarter with ~ $1.4B of cash and investments, repurchased ~300k shares in Q4, increased the quarterly dividend to $0.70 (a 17% increase), and enter FY27 having hired/acquired 33 MDs in the year and promoted 25 MDs in Q1.Houlihan Lokey Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
85
Very Positive
Cash Flow
74
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.62B | 2.39B | 1.91B | 1.81B | 2.27B |
| Gross Profit | 2.57B | 919.92M | 737.05M | 696.64M | 861.32M |
| EBITDA | 604.90M | 597.59M | 427.63M | 435.03M | 661.40M |
| Net Income | 425.70M | 399.71M | 280.30M | 254.22M | 437.75M |
Balance Sheet | |||||
| Total Assets | 4.31B | 3.82B | 3.17B | 2.97B | 2.89B |
| Cash, Cash Equivalents and Short-Term Investments | 1.19B | 1.14B | 728.80M | 720.69M | 833.70M |
| Total Debt | 492.11M | 438.19M | 415.41M | 374.87M | 197.63M |
| Total Liabilities | 1.86B | 1.64B | 1.33B | 1.36B | 1.44B |
| Stockholders Equity | 2.34B | 2.17B | 1.84B | 1.61B | 1.44B |
Cash Flow | |||||
| Free Cash Flow | 681.82M | 808.91M | 261.73M | 85.54M | 727.92M |
| Operating Cash Flow | 704.13M | 848.61M | 328.46M | 136.27M | 736.60M |
| Investing Cash Flow | 2.18M | -265.06M | -70.41M | -3.00M | -273.91M |
| Financing Cash Flow | -492.94M | -329.07M | -250.59M | -240.46M | -459.06M |
Houlihan Lokey Technical Analysis
Positive
162.50
Price Trends
149.45
Positive
160.08
Negative
174.22
Negative
Market Momentum
-0.76
Positive
49.73
Neutral
61.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLI, the sentiment is Positive. The current price of 162.5 is above the 20-day moving average (MA) of 151.96, above the 50-day MA of 149.45, and below the 200-day MA of 174.22, indicating a neutral trend. The MACD of -0.76 indicates Positive momentum. The RSI at 49.73 is Neutral, neither overbought nor oversold. The STOCH value of 61.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLI.
Houlihan Lokey Risk Analysis
Houlihan Lokey disclosed 27 risk factors in its most recent earnings report. Houlihan Lokey 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
Houlihan Lokey Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $13.39B | 9.65 | 41.05% | 0.95% | 47.30% | 68.64% | |
76 Outperform | $5.73B | 19.90 | 21.56% | 1.63% | 30.99% | 32.50% | |
74 Outperform | $11.14B | 7.56 | 15.14% | 1.43% | 9.07% | 45.94% | |
73 Outperform | $10.57B | 22.45 | 18.79% | 1.33% | 9.48% | 5.23% | |
73 Outperform | $5.35B | 27.97 | 42.00% | 3.69% | 19.19% | 26.01% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
53 Neutral | $10.63B | 13.64 | 7.08% | 2.52% | 1.91% | 2.34% |
* Financial Sector Average
HLI
Houlihan Lokey
151.63
-18.89
-11.08%
EVR
Evercore Partners
346.12
122.58
54.84%
JEF
Jefferies
51.98
4.95
10.52%
PIPR
Piper Sandler
80.68
19.91
32.77%
SF
Stifel Financial
72.59
11.57
18.96%
MC
Moelis
65.76
11.41
21.00%
Houlihan Lokey Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Houlihan Lokey Files Prospectus Supplement for Share Resales
Neutral
Feb 25, 2026
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 af...
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.