Houlihan Lokey (HLI)
NYSE:HLI
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Houlihan Lokey
(NYSE:HLI)
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Rating:64Neutral
Price Target:
$158.00
â–²(4.27% Upside)
Action:DowngradedDate:02/04/26
The score is driven primarily by solid underlying financial performance and a constructive earnings-call outlook (growth, improving deal visibility, strong liquidity/capital deployment). These positives are tempered by notably weak technical momentum (below major moving averages with negative MACD) and a relatively premium valuation with only a modest dividend yield.
Positive Factors
Strong profitability and ROE
Sustained double-digit margins and roughly 20% ROE indicate durable earnings power for an advisory firm. High margins reflect pricing power on transaction and valuation work, supporting reinvestment, talent retention, and capital returns across business cycles, bolstering long-term shareholder value.
Negative Factors
Revenue cyclicality and uneven growth history
Houlihan Lokey’s transaction-driven revenue profile creates persistent forecasting and earnings volatility. Dependence on deal closings means multi-quarter swings are structural, complicating margin and headcount planning and increasing the risk of revenue compression when M&A and financing markets soften.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and ROE
Sustained double-digit margins and roughly 20% ROE indicate durable earnings power for an advisory firm. High margins reflect pricing power on transaction and valuation work, supporting reinvestment, talent retention, and capital returns across business cycles, bolstering long-term shareholder value.
Read all positive factors
Houlihan Lokey (HLI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.57B
Dividend Yield1.33%
Average Volume (3M)612.99K
Price to Earnings (P/E)24.9
Beta (1Y)1.00
Revenue Growth20.99%
EPS Growth25.02%
CountryUS
Employees2,601
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.94
Shares Outstanding54,450,590
10 Day Avg. Volume517,147
30 Day Avg. Volume612,991
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)4.88
Price to Sales (P/S)4.44
P/FCF Ratio13.12
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue4.09
Enterprise Value/Gross Profit7.58
Enterprise Value/Ebitda16.21
Forecast
1Y Price Target
$194.17Price Target Upside28.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)8.46
Revenue Forecast (FY)$2.98B
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:Jan 28, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call delivered multiple clear positive operating and strategic signals: double-digit revenue and EPS growth, strong performance across core businesses (notably Corporate Finance and Restructuring this quarter), an expanding European presence via targeted acquisitions, a healthy balance sheet (~$1.2B cash), and top-market industry rankings. Offsetting items are manageable: rising absolute compensation and non-comp costs (though ratios are stable), localized cost pressure from acquisitions, and caution about restructuring revenue as markets improve plus macro/geopolitical uncertainty. Overall, the positives — revenue/earnings growth, deal pipeline strength, strategic M&A and market share momentum — outweigh the cautions.Positive Updates
Strong Quarter — Revenue and EPS Growth
Total revenues of $717 million, up 13% year-over-year; adjusted EPS of $1.94, up 18% year-over-year.
Negative Updates
Restructuring Outlook Uncertainty for FY2027
Management expects potential revenue pressures in Financial Restructuring as markets improve (structural decline in demand for restructuring when M&A and capital availability improve), creating uncertainty about near-term restructuring revenue levels despite Q3 strength.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Quarter — Revenue and EPS Growth
Total revenues of $717 million, up 13% year-over-year; adjusted EPS of $1.94, up 18% year-over-year.
Read all positive updates
Company Guidance
The company guided to continued momentum into fiscal 2027 driven by improving M&A activity and stronger visibility into deal activity/backlog, reporting Q3 revenues of $717 million and adjusted EPS of $1.94 (up 13% and 18% YoY, respectively), with Corporate Finance at $474M (up 12%, 177 closed deals vs. 170), Financial Restructuring $156M (up 19%, 41 deals), and Financial & Valuation Advisory $87M (up 6%, 1,103 fee events vs. 1,015, +10%); they noted Q3 restructuring strength may reverse typical seasonality (Q3 > Q4) but expect restructuring revenues to face pressure in FY27 (though geopolitical risks could increase activity). On costs, adjusted compensation was $441M vs. $390M (adjusted comp ratio 61.5%, target maintained), adjusted non-comp ratio 13.1% (YTD non-comp expenses +11%) with $2.2M, $1.3M and $0.6M of specific adjustments; adjusted tax rate 30.6% (vs. 33.3%). Balance sheet/capital deployment metrics: cash & investments ≈ $1.2B, ~418,000 shares repurchased in Q3, preference to prioritize strategic acquisitions (pipeline described as strong) then dividends/repurchases.Houlihan Lokey Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.65B | 2.39B | 1.91B | 1.81B | 2.27B | 1.53B |
| Gross Profit | 1.43B | 919.92M | 737.05M | 696.64M | 861.32M | 554.26M |
| EBITDA | 667.85M | 597.59M | 427.63M | 435.03M | 661.40M | 423.38M |
| Net Income | 447.78M | 399.71M | 280.30M | 254.22M | 437.75M | 312.77M |
Balance Sheet | ||||||
| Total Assets | 3.94B | 3.82B | 3.17B | 2.97B | 2.89B | 2.43B |
| Cash, Cash Equivalents and Short-Term Investments | 1.18B | 1.14B | 728.80M | 720.69M | 833.70M | 846.85M |
| Total Debt | 994.26M | 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 | 2.29B | 2.17B | 1.84B | 1.61B | 1.44B | 1.38B |
Cash Flow | ||||||
| Free Cash Flow | 738.94M | 808.91M | 261.73M | 85.54M | 727.92M | 565.69M |
| Operating Cash Flow | 769.48M | 848.61M | 328.46M | 136.27M | 736.60M | 579.84M |
| Investing Cash Flow | -54.57M | -265.06M | -70.41M | -3.00M | -273.91M | -99.75M |
| Financing Cash Flow | -491.25M | -329.07M | -250.59M | -240.46M | -459.06M | -26.82M |
Houlihan Lokey Technical Analysis
Negative
151.53
Price Trends
154.37
Negative
166.43
Negative
179.28
Negative
Market Momentum
-1.80
Negative
58.54
Neutral
93.51
Negative
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 151.53 is above the 20-day moving average (MA) of 141.91, below the 50-day MA of 154.37, and below the 200-day MA of 179.28, indicating a neutral trend. The MACD of -1.80 indicates Negative momentum. The RSI at 58.54 is Neutral, neither overbought nor oversold. The STOCH value of 93.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.95B | 20.12 | 22.08% | 1.63% | 12.77% | 36.43% | |
71 Outperform | $5.03B | 22.13 | 44.30% | 3.69% | 51.19% | 456.59% | |
70 Outperform | $13.38B | 25.51 | 33.81% | 0.95% | 27.00% | 63.47% | |
70 Outperform | $11.96B | 12.55 | 11.96% | 1.43% | 7.54% | 2.73% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $10.57B | 24.90 | 20.14% | 1.33% | 20.99% | 25.02% | |
49 Neutral | $9.35B | 16.65 | 6.77% | 2.52% | -5.41% | 25.28% |
* Financial Sector Average
HLI
Houlihan Lokey
151.53
-1.46
-0.96%
EVR
Evercore Partners
337.90
158.80
88.67%
JEF
Jefferies
45.76
3.24
7.62%
PIPR
Piper Sandler
83.47
28.61
52.15%
SF
Stifel Financial
77.24
21.98
39.78%
MC
Moelis
63.04
13.04
26.09%
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...
Executive/Board Changes
Houlihan Lokey announces planned director board departure
Neutral
Jan 29, 2026
On January 24, 2026, Houlihan Lokey, Inc. announced that director Robert A. Schriesheim, who has served on the company’s board since July 2015, notified the firm that he will not stand for reelection when his current term ends at the 2027 An...
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.