Houlihan Lokey (HLI) AI Stock Analysis

• Market Cap: $12.59B
• Dividend Yield: 1.34%
• Average Volume (3M): 479.80K
• Price to Earnings (P/E): 29.0
• Beta (1Y): 0.94
• Revenue Growth: 20.99%
• EPS Growth: 25.02%
• Country: US
• Employees: 2,601
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 1.84
• Shares Outstanding: 54,515,003
• 10 Day Avg. Volume: 317,761
• 30 Day Avg. Volume: 479,802
• 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: 1.08
• Enterprise Value/Revenue: 5.30
• Enterprise Value/Gross Profit: 14.23
• Enterprise Value/Ebitda: 20.67
• 1Y Price Target: $222.75
• Price Target Upside: 25.45% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 7.91
• Revenue Forecast (FY): $2.73B

• Rating: 70 Outperform
• Price Target: $197.00 ▲(10.95% Upside)

Houlihan Lokey's strong financial performance and positive earnings call sentiment are the primary drivers of its overall score. However, bearish technical indicators and a relatively high P/E ratio temper the outlook. The company's robust cash flows and conservative leverage profile provide a solid foundation, but market sentiment and valuation concerns warrant caution.

Positive Factors

Revenue Growth

Consistent revenue and earnings growth indicate strong demand for services and effective business strategies, supporting long-term expansion.

Conservative Leverage

A conservative leverage profile enhances financial stability and flexibility, allowing the company to navigate economic fluctuations effectively.

Non-U.S. Business Expansion

Expanding presence in international markets diversifies revenue streams and reduces dependency on the U.S. market, supporting long-term growth.

Negative Factors

Decreased Average Transaction Fees

Decreased transaction fees could pressure profit margins, impacting revenue per deal and potentially affecting overall profitability.

Slowdown in Restructuring Activity

A slowdown in restructuring activity may reduce revenue from this segment, affecting growth if not offset by other business areas.

Increased Compensation Expenses

Rising compensation expenses can strain profit margins, requiring careful management to maintain profitability while attracting talent.

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 associated with its financial advisory services, which include M&A advisory, capital raising, and financial restructuring services. The firm earns a substantial portion of its income from success fees tied to completed transactions, alongside retainer fees for ongoing advisory relationships. Additionally, Houlihan Lokey engages in valuation services, providing independent assessments that contribute to its revenue. The company benefits from its extensive network and reputation in the mid-market sector, leading to repeat business and referrals. Strategic partnerships with financial institutions and private equity firms also enhance its capabilities and market access, further contributing to its earnings.

Houlihan Lokey Financial Statement Overview

Summary

Houlihan Lokey demonstrates strong financial health with consistent revenue and profit growth, efficient operational management, and a stable balance sheet. The company maintains a conservative leverage profile and generates robust cash flows, positioning it well for future growth. Minor fluctuations in certain metrics do not overshadow the overall positive trajectory.

Income Statement

Houlihan Lokey demonstrates strong financial performance with consistent revenue growth, evidenced by a 3.41% increase in the TTM period. The company maintains healthy profitability margins, including a gross profit margin of 37.22% and a net profit margin of 16.62%. The EBIT and EBITDA margins are also robust at 23.62% and 25.62%, respectively, indicating efficient operational management. Despite a slight decline in gross profit margin compared to the previous year, overall profitability remains strong.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.19, suggesting conservative leverage. The return on equity is solid at 19.66%, indicating effective use of equity to generate profits. The equity ratio stands at 59.22%, highlighting a strong equity base relative to total assets. While the company has managed its debt well, the slight increase in debt levels over the years warrants monitoring.

Cash Flow

Cash flow analysis shows positive trends with a 5.96% growth in free cash flow in the TTM period. The operating cash flow to net income ratio is 0.84, reflecting good cash generation relative to net income. The free cash flow to net income ratio is high at 0.95, indicating strong cash conversion. The company has demonstrated consistent improvement in cash flow metrics, supporting its financial flexibility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.57B	2.39B	1.91B	1.81B	2.27B	1.53B
Gross Profit	954.86M	919.92M	737.05M	696.64M	861.32M	554.26M
EBITDA	657.29M	597.59M	427.63M	435.03M	661.40M	423.38M
Net Income	426.54M	399.71M	280.30M	254.22M	437.75M	312.77M
Balance Sheet
Total Assets	3.79B	3.82B	3.17B	2.97B	2.89B	2.43B
Cash, Cash Equivalents and Short-Term Investments	1.08B	1.14B	728.80M	720.69M	833.70M	846.85M
Total Debt	432.90M	438.19M	415.41M	374.87M	197.63M	175.33M
Total Liabilities	1.55B	1.64B	1.33B	1.36B	1.44B	1.04B
Stockholders Equity	2.25B	2.17B	1.84B	1.61B	1.44B	1.38B
Cash Flow
Free Cash Flow	783.56M	808.91M	261.73M	85.54M	727.92M	565.69M
Operating Cash Flow	817.31M	848.61M	328.46M	136.27M	736.60M	579.84M
Investing Cash Flow	-198.38M	-265.06M	-70.41M	-3.00M	-273.91M	-99.75M
Financing Cash Flow	-397.21M	-329.07M	-250.59M	-240.46M	-459.06M	-26.82M

Houlihan Lokey Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 177.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 177.56 is above the 20-day moving average (MA) of 176.27, below the 50-day MA of 185.81, and below the 200-day MA of 179.39, indicating a neutral trend. The MACD of -2.37 indicates Negative momentum. The RSI at 45.48 is Neutral, neither overbought nor oversold. The STOCH value of 74.51 is Neutral, 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
MC	78 Outperform	$5.53B	22.99	51.98%	3.74%	51.19%	456.59%
EVR	76 Outperform	$12.83B	26.45	31.39%	0.98%	27.00%	63.47%
SF	74 Outperform	$12.80B	22.19	11.73%	1.45%	7.54%	2.73%
HLI	70 Outperform	$12.59B	29.01	20.29%	1.34%	20.99%	25.02%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PIPR	67 Neutral	$5.77B	24.59	19.30%	1.59%	12.77%	36.43%
JEF	63 Neutral	$12.20B	20.37	6.29%	2.69%	-5.41%	25.28%

Houlihan Lokey Corporate Events

Houlihan Lokey Expands Board, Appoints New Director

On September 30, 2025, Houlihan Lokey‘s Board of Directors approved an increase in the board size from ten to eleven members, appointing R. Scott Mund as an independent Class II director effective October 1, 2025. Mr. Mund, a partner at Deloitte LLP with extensive experience in advising multinational companies on M&A and corporate governance, will serve until the 2026 Annual Meeting of Stockholders. His appointment to the Nominating and Corporate Governance Committee is expected to enhance the company’s strategic planning and governance capabilities. Mr. Mund will receive standard compensation, including an award of restricted shares valued at $100,000, vesting over three years.

Houlihan Lokey Holds Annual Stockholder Meeting

On September 17, 2025, Houlihan Lokey, Inc. held its annual meeting of stockholders where key proposals were voted on. Stockholders elected three Class I directors to the board, approved the executive compensation on an advisory basis, and ratified KPMG LLP as the independent public accounting firm for the fiscal year ending March 31, 2026. These decisions are pivotal for the company’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.