Houlihan Lokey (HLI) AI Stock Analysis

• Market Cap: $13.42B
• Dividend Yield: 1.21%
• Average Volume (3M): 399.26K
• Price to Earnings (P/E): 32.2
• Beta (1Y): 0.97
• Revenue Growth: 23.39%
• EPS Growth: 29.86%
• Country: US
• Employees: 2,601
• Sector: Financial
• Sector Strength: 69
• Industry: Financial - Capital Markets
• EPS (TTM): 2.14
• Shares Outstanding: 54,351,482
• 10 Day Avg. Volume: 336,172
• 30 Day Avg. Volume: 399,260
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 5.04
• Enterprise Value/Gross Profit: 14.51
• Enterprise Value/Ebitda: 21.16
• 1Y Price Target: $201.67
• Price Target Upside: 5.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 78 Outperform
• Price Target: $218.00 ▲(14.05% Upside)

Houlihan Lokey's strong financial performance and optimistic earnings call sentiment are the primary drivers of its stock score. While technical indicators suggest a neutral trend, the high P/E ratio indicates a relatively expensive valuation. The company's ability to adapt to market conditions and maintain growth supports a positive outlook.

Positive Factors

Business Growth

Capital Solutions had a record year and is 'really growing' into a significant contributor with approximately 40 MDs.

Earnings

HLI delivered a high quality 21% adj. EPS beat across the board on Corporate Finance, Restructuring, and Financial & Valuation Advisory.

Revenue Performance

Strong revenue beat in Corporate Finance (+36% y/y), RX (+2% y/y) and FVA (+14% y/y).

Negative Factors

Market Uncertainty

Restructuring contribution is anticipated to remain a bit more resilient than was suggested a year ago.

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 generates revenue primarily through advisory fees earned from its M&A and financial restructuring services. The firm charges clients a retainer and a success fee based on the deal's value upon completion. Additionally, it earns fees from capital markets activities, including underwriting and syndication services for debt and equity offerings. The firm's valuation services also contribute to its revenue, providing clients with independent assessments of asset values. Significant partnerships and relationships with private equity firms and institutional investors enhance its deal flow, further bolstering its earnings. The firm's ability to attract high-profile clients and maintain a strong market presence in key sectors are critical factors in its revenue generation.

Houlihan Lokey Financial Statement Overview

Summary

Houlihan Lokey demonstrates strong financial health with robust revenue and profit growth, efficient cost management, and impressive cash flow generation. The balance sheet reflects low leverage and high equity, providing financial stability and flexibility to fund growth.

Income Statement

Houlihan Lokey has demonstrated strong revenue growth with a 24.8% increase in the latest year, supported by improvements in both gross profit and net profit margins. The EBIT and EBITDA margins have also shown resilience, indicating effective operational management. Overall, the income statement reflects robust financial performance with consistent profitability.

Balance Sheet

The balance sheet presents a solid equity base with an equity ratio of 56.9%, indicating financial stability. The company maintains a manageable debt-to-equity ratio of 0.2, suggesting low leverage and reduced financial risk. Return on Equity is healthy at 18.4%, demonstrating effective use of shareholder equity to generate profits. The balance sheet is strong, though there's room for optimizing asset utilization.

Cash Flow

Cash flow analysis reveals a significant improvement in operating cash flow, which outpaced net income, indicating robust cash-generating capability. The free cash flow grew substantially by 209% over the prior year, highlighting excellent cash management. The free cash flow to net income ratio is 2.0, reflecting ample cash available after capital expenditures. The cash flow position is strong and supports ongoing investments and financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.39B	2.39B	1.91B	1.81B	2.27B	1.53B
Gross Profit	829.42M	919.92M	737.05M	696.64M	861.32M	554.26M
EBITDA	568.93M	597.59M	391.40M	435.03M	661.40M	446.14M
Net Income	399.71M	399.71M	280.30M	254.22M	437.75M	312.77M
Balance Sheet
Total Assets	3.82B	3.82B	3.17B	2.97B	2.89B	2.43B
Cash, Cash Equivalents and Short-Term Investments	1.14B	1.14B	728.80M	720.69M	833.70M	846.85M
Total Debt	438.19M	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	2.17B	2.17B	1.84B	1.61B	1.44B	1.38B
Cash Flow
Free Cash Flow	808.91M	808.91M	261.73M	85.54M	727.92M	565.69M
Operating Cash Flow	848.61M	848.61M	328.46M	136.27M	736.60M	579.84M
Investing Cash Flow	-265.06M	-265.06M	-70.41M	-3.00M	-273.91M	-99.75M
Financing Cash Flow	-329.07M	-329.07M	-250.59M	-240.46M	-459.06M	-26.82M

Houlihan Lokey Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 191.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 191.14 is below the 20-day moving average (MA) of 192.52, above the 50-day MA of 186.98, and above the 200-day MA of 175.26, indicating a neutral trend. The MACD of 1.10 indicates Positive momentum. The RSI at 52.69 is Neutral, neither overbought nor oversold. The STOCH value of 34.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLI.

Houlihan Lokey Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAZ	79 Outperform	$5.10B	18.64	50.41%	3.73%	10.40%	91.75%
HLI	78 Outperform	$13.42B	32.16	20.38%	1.21%	23.39%	29.86%
EVR	77 Outperform	$11.90B	27.99	29.16%	1.06%	23.24%	55.76%
PJT	76 Outperform	$6.26B	30.87	106.47%	0.57%	18.40%	54.77%
SF	74 Outperform	$11.62B	21.99	11.11%	1.56%	8.76%	10.32%
JEF	68 Neutral	$12.43B	22.83	5.75%	2.59%	1.00%	46.98%
Sector *	62 Neutral	C$15.86B	6.93	15.47%	5.98%	21.65%	-3.45%

Houlihan Lokey Corporate Events

Houlihan Lokey Revises Incentive Award Plan Shares

Houlihan Lokey, Inc. has revised its 2016 Incentive Award Plan, reducing the available shares of common stock to 8 million, effective from October 24, 2024. The share count will further adjust on April 1, 2025, based on specific criteria, potentially impacting stock availability and market dynamics.