Houlihan Lokey (HLI) AI Stock Analysis

• Market Cap: $14.43B
• Dividend Yield: 1.14%
• Average Volume (3M): 372.88K
• Price to Earnings (P/E): 34.6
• Beta (1Y): 0.96
• Revenue Growth: 23.39%
• EPS Growth: 29.86%
• Country: US
• Employees: 2,601
• Sector: Financial
• Sector Strength: 73
• Industry: Financial - Capital Markets
• EPS (TTM): 2.14
• Shares Outstanding: 54,351,482
• 10 Day Avg. Volume: 393,007
• 30 Day Avg. Volume: 372,875
• 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: 0.83
• Enterprise Value/Revenue: 4.85
• Enterprise Value/Gross Profit: 12.60
• Enterprise Value/Ebitda: 19.32
• 1Y Price Target: $202.60
• Price Target Upside: -1.26% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: $225.00 ▲(9.65% Upside)

Houlihan Lokey's overall stock score of 77 reflects its strong financial performance and positive earnings call, which highlight significant revenue and EPS growth. The technical analysis supports a neutral to slightly bullish outlook. However, the high P/E ratio suggests potential overvaluation, and the modest dividend yield provides limited income. The recent corporate event enhances financial flexibility, further supporting the company's strategic positioning.

Positive Factors

Revenue Growth

The significant revenue growth of 18% YoY underscores the company's expanding market reach and successful execution of its business strategy, which is crucial for long-term sustainability.

Credit Agreement Amendment

The amendment to the credit agreement enhances financial flexibility and operational capacity, supporting strategic initiatives and market positioning over the long term.

EPS Growth

The substantial 75% increase in EPS reflects strong operational efficiency and profitability, indicating a robust financial foundation for future growth.

Negative Factors

Muted Sponsor Activity

Muted sponsor activity in Corporate Finance could hinder transaction volumes, potentially impacting revenue growth and market competitiveness in the long term.

Higher Non-compensation Expenses

Rising non-compensation expenses may pressure profit margins, affecting the company's ability to maintain cost efficiency and profitability over time.

Regional Performance Disparity

Disparities in regional performance, particularly slower growth in EMEA, could limit global expansion efforts and affect overall revenue diversification.

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 exhibits strong financial health with robust revenue and profit growth, efficient cost management, low leverage, and impressive cash flow generation. These factors underscore the company's ability to fund growth and manage liquidity effectively.

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	2.48B	2.39B	1.91B	1.81B	2.27B	1.53B
Gross Profit	955.25M	919.92M	737.05M	696.64M	861.32M	554.26M
EBITDA	623.15M	597.59M	427.63M	435.03M	661.40M	423.38M
Net Income	408.30M	399.71M	280.30M	254.22M	437.75M	312.77M
Balance Sheet
Total Assets	3.52B	3.82B	3.17B	2.97B	2.89B	2.43B
Cash, Cash Equivalents and Short-Term Investments	837.13M	1.14B	728.80M	720.69M	833.70M	846.85M
Total Debt	440.38M	438.19M	415.41M	374.87M	197.63M	175.33M
Total Liabilities	1.34B	1.64B	1.33B	1.36B	1.44B	1.04B
Stockholders Equity	2.18B	2.17B	1.84B	1.61B	1.44B	1.38B
Cash Flow
Free Cash Flow	739.48M	808.91M	261.73M	85.54M	727.92M	565.69M
Operating Cash Flow	781.49M	848.61M	328.46M	136.27M	736.60M	579.84M
Investing Cash Flow	-114.98M	-265.06M	-70.41M	-3.00M	-273.91M	-99.75M
Financing Cash Flow	-364.20M	-329.07M	-250.59M	-240.46M	-459.06M	-26.82M

Houlihan Lokey Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 205.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 205.19 is above the 20-day moving average (MA) of 196.94, above the 50-day MA of 193.72, and above the 200-day MA of 176.34, indicating a bullish trend. The MACD of 3.03 indicates Negative momentum. The RSI at 62.61 is Neutral, neither overbought nor oversold. The STOCH value of 91.60 is Negative, 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
MC	80 Outperform	$6.03B	29.43	45.36%	3.41%	42.85%	1398.33%
EVR	79 Outperform	$13.20B	31.09	29.16%	0.96%	23.24%	55.76%
HLI	77 Outperform	$14.43B	34.59	20.38%	1.14%	23.39%	29.86%
SF	77 Outperform	$11.78B	22.29	11.11%	1.56%	8.76%	10.32%
PIPR	73 Outperform	$6.12B	29.19	17.91%	1.63%	10.46%	50.47%
Sector *	68 Neutral	$18.02B	11.58	9.93%	3.75%	9.73%	1.23%
JEF	68 Neutral	$13.75B	25.26	5.75%	2.33%	1.00%	46.98%

Houlihan Lokey Corporate Events

Houlihan Lokey Amends Credit Agreement to Boost Flexibility

On August 19, 2025, Houlihan Lokey, Inc. and its subsidiaries entered into a Second Amendment to their Credit Agreement, originally dated August 23, 2019. The amendment increases the revolving credit commitments from $100 million to $150 million, reduces interest rate margins and fees, modifies covenant restrictions, and extends the credit facility’s maturity to August 19, 2030. These changes are expected to enhance the company’s financial flexibility and operational capacity, potentially impacting its market positioning and stakeholder interests positively.