Houlihan Lokey (HLI) AI Stock Analysis

• Market Cap: $12.20B
• Dividend Yield: 1.37%
• Average Volume (3M): 346.70K
• Price to Earnings (P/E): 30.0
• Beta (1Y): 0.97
• Revenue Growth: 24.88%
• EPS Growth: 39.55%
• Country: US
• Employees: 2,601
• Sector: Financial
• Sector Strength: 77
• Industry: Financial - Capital Markets
• EPS (TTM): 1.96
• Shares Outstanding: 53,789,856
• 10 Day Avg. Volume: 300,812
• 30 Day Avg. Volume: 346,705
• PEG Ratio: -0.54
• Price to Book (P/B): 3.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 64.80
• Enterprise Value/Market Cap: 0.43
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 6.27
• Enterprise Value/Ebitda: 2.68
• 1Y Price Target: $180.33
• Price Target Upside: 2.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 79 Outperform
• Price Target: $198.00 ▲(12.86%Upside)

Houlihan Lokey's overall stock score is driven by strong financial performance and positive earnings call sentiment, indicating robust growth and strategic success. Technical indicators suggest moderate bullish momentum, but the valuation appears somewhat stretched, which modestly impacts the overall attractiveness of the stock.

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.

Negative Factors

Market Conditions

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

Operational Efficiency

Noncomp ratio of 13.1% is HLI's most efficient in nearly 3 years.

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 through a variety of financial services, primarily focusing on advisory fees. In its corporate finance segment, the company earns fees by advising on mergers and acquisitions, capital raising, and other strategic transactions. The financial restructuring segment generates income by assisting clients with distressed debt situations, including out-of-court restructurings and bankruptcy proceedings. In its financial advisory services, Houlihan Lokey provides valuation opinions and financial consulting, which also contribute to its revenue. The firm partners with corporations, investment funds, and other institutions, leveraging its expertise to drive successful transactions and solutions that enhance their financial positions.

Houlihan Lokey Financial Statement Overview

Summary

Houlihan Lokey exhibits 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.

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
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
2.39B	1.91B	1.81B	2.27B	1.53B
	Gross Profit
919.92M	737.05M	696.64M	861.32M	554.26M
	EBIT
501.54M	362.86M	341.74M	612.86M	408.16M
	EBITDA
572.61M	391.40M	435.03M	661.40M	446.14M
	Net Income Common Stockholders
399.71M	280.30M	254.22M	437.75M	312.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.14B	728.80M	720.69M	833.70M	846.85M
	Total Assets
3.82B	3.17B	2.97B	2.89B	2.43B
	Total Debt
438.19M	415.41M	374.87M	197.63M	175.33M
	Net Debt
-532.82M	-305.82M	-339.57M	-636.07M	-671.52M
	Total Liabilities
1.64B	1.33B	1.36B	1.44B	1.04B
	Stockholders Equity
2.17B	1.84B	1.61B	1.44B	1.38B
Cash Flow		Free Cash Flow
808.91M	261.73M	85.54M	727.92M	565.69M
	Operating Cash Flow
848.61M	328.46M	136.27M	736.60M	579.84M
	Investing Cash Flow
-265.06M	-70.41M	-3.00M	-273.91M	-99.75M
	Financing Cash Flow
-329.07M	-250.59M	-240.46M	-459.06M	-26.82M

Houlihan Lokey Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 175.44
• 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 175.44 is above the 20-day moving average (MA) of 175.28, above the 50-day MA of 165.67, and above the 200-day MA of 168.55, indicating a bullish trend. The MACD of 1.99 indicates Positive momentum. The RSI at 56.63 is Neutral, neither overbought nor oversold. The STOCH value of 48.48 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
HLI	79 Outperform	$12.20B	30.02	19.93%	1.37%	24.88%	39.55%
PJT	74 Outperform	$5.46B	27.49	96.33%	0.64%	16.04%	60.32%
EVR	74 Outperform	$9.57B	23.71	29.73%	1.36%	26.88%	68.65%
LAZ	74 Outperform	$4.02B	14.90	59.68%	4.57%	9.54%	―
SF	72 Outperform	$9.92B	18.40	11.48%	1.90%	12.85%	20.21%
JEF	67 Neutral	$10.87B	18.26	6.38%	3.04%	16.62%	139.24%
Sector *	65 Neutral	$12.93B	9.81	7.84%	78.03%	12.20%	-7.74%

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.