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Houlihan Lokey
(NYSE:HLI)
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Rating:72Outperform
Price Target:
$152.00
▲(17.79% Upside)
Action:Reiterated
Date:10/29/26
HLI scores well primarily on solid underlying financial quality (strong margins, low leverage, and good cash conversion) and a constructive earnings-call outlook driven by backlog and expected second-half/restructuring strength. The score is moderated by mixed technical positioning (still below the 200-day average) and a valuation that is fair rather than clearly discounted (P/E ~22.7 with a modest ~1.9% yield).
Positive Factors
Strong profitability and leverage
Healthy operating and net margins provide a durable earnings base, while conservative leverage limits balance-sheet strain. This combination gives Houlihan Lokey flexibility to invest in talent, pursue acquisitions, and withstand periods of uneven advisory activity without relying heavily on borrowing.
Negative Factors
Cyclical and uneven revenue
Transaction-driven advisory revenue remains exposed to changing M&A, financing, and credit conditions. The history of sharp rebounds followed by declines shows that strong margins do not eliminate earnings volatility, creating a continuing risk to revenue visibility over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and leverage
Healthy operating and net margins provide a durable earnings base, while conservative leverage limits balance-sheet strain. This combination gives Houlihan Lokey flexibility to invest in talent, pursue acquisitions, and withstand periods of uneven advisory activity without relying heavily on borrowing.
Read all positive factors
Houlihan Lokey (HLI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.60B
Dividend Yield1.89%
Average Volume (3M)793.29K
Price to Earnings (P/E)22.7
Beta (1Y)0.96
Revenue Growth1.59%
EPS Growth-1.40%
CountryUS
Employees2,800
SectorFinancial
Sector Strength70
IndustryInvestment - Banking & Investment Services
Share Statistics
EPS (TTM)6.09
Shares Outstanding54,197,536
10 Day Avg. Volume640,501
30 Day Avg. Volume793,292
Financial Highlights & Ratios
PEG Ratio4.26
Price to Book (P/B)4.08
Price to Sales (P/S)3.65
P/FCF Ratio14.02
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue3.54
Enterprise Value/Gross Profit6.96
Enterprise Value/Ebitda15.01
Forecast
1Y Price Target
$159.75Price Target Upside23.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)6.96
Revenue Forecast (FY)$2.62B
Houlihan Lokey Business Overview & Revenue Model
Company Description
Houlihan Lokey, Inc. is a prominent global investment banking firm offering a comprehensive suite of financial advisory services. These include expertise in mergers and acquisitions (M&A), capital markets, financial restructuring, and valuation. T...
How the Company Makes Money
Houlihan Lokey primarily makes money by earning advisory fees for executing and advising on transactions, rather than through interest income from lending or profits from principal investing. Its key revenue streams are: (1) Corporate Finance (M&A...
Houlihan Lokey Earnings Call Summary
Earnings Call Date:Oct 28, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Feb 02, 2027
Earnings Call Sentiment Positive
The call was broadly constructive. Revenue grew 5%, Corporate Finance and FVA produced year-over-year growth, deal activity is improving, and management raised confidence in the second-half and restructuring outlook. The company also reported strong liquidity, acquisition activity, and share repurchases. Offsetting factors included flat adjusted EPS, lower restructuring transaction volume and revenue, higher non-compensation expenses, weaker software activity, and continued macroeconomic and geopolitical uncertainty. Highlights significantly outweighed the lowlights.Positive Updates
Quarterly Revenue Growth
Second-quarter revenues were $692 million, up 5% from the same period last year. Adjusted earnings per share were $1.85, flat year over year.
Negative Updates
Adjusted EPS Flat Despite Revenue Growth
Adjusted earnings per share were $1.85, flat compared with the same period last year, while revenues increased 5%.
Read all updates
Q2-2027 Updates
Positive
Negative
Quarterly Revenue Growth
Second-quarter revenues were $692 million, up 5% from the same period last year. Adjusted earnings per share were $1.85, flat year over year.
Read all positive updates
Company Guidance
Management expects Corporate Finance backlog and activity levels to suggest growth for the balance of the year, with capital solutions and non-M&A businesses performing similarly by the end of the year, no divergence between M&A and non-M&A businesses through fiscal '27, and Europe and the U.S. looking about the same by the end of the year; it expects an unseasonably higher seasonality in our second half and a good solid second half that's better than normal for us. Financial Restructuring is expected to have a stronger second half of the year, elevated restructuring revenues through fiscal 2028, and record backlog and strong activity levels approaching calendar 2027, while software engagements are expected to begin contributing to revenues in calendar '27, with revenues from software activity expected in calendar '27 and calendar '28. Management expects to maintain its long-term target of 61.5% for its adjusted compensation expense ratio for fiscal 2027, a fiscal 2027 full year adjusted effective tax rate of between 26% and 28%, and non-compensation expenses to grow similarly to last year by the time we reach the end of the fiscal year.Houlihan Lokey Financial Statement Overview
Summary
Income Statement
77
Positive
Balance Sheet
82
Very Positive
Cash Flow
70
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.52B | 2.62B | 2.39B | 1.91B | 1.81B | 2.27B |
| Gross Profit | 1.28B | 2.57B | 919.92M | 737.05M | 696.64M | 861.32M |
| EBITDA | 594.44M | 604.90M | 597.59M | 427.63M | 435.03M | 661.40M |
| Net Income | 406.16M | 425.70M | 399.71M | 280.30M | 254.22M | 437.75M |
Balance Sheet | ||||||
| Total Assets | 3.72B | 4.31B | 3.82B | 3.17B | 2.97B | 2.89B |
| Cash, Cash Equivalents and Short-Term Investments | 797.00M | 1.36B | 1.14B | 728.80M | 720.69M | 833.70M |
| Total Debt | 493.00M | 492.11M | 438.19M | 415.41M | 374.87M | 197.63M |
| Total Liabilities | 1.35B | 1.86B | 1.64B | 1.33B | 1.36B | 1.44B |
| Stockholders Equity | 2.25B | 2.34B | 2.17B | 1.84B | 1.61B | 1.44B |
Cash Flow | ||||||
| Free Cash Flow | 484.63M | 681.82M | 808.91M | 261.73M | 85.54M | 727.92M |
| Operating Cash Flow | 499.76M | 704.13M | 848.61M | 328.46M | 136.27M | 736.60M |
| Investing Cash Flow | 4.53M | 2.18M | -265.06M | -70.41M | -3.00M | -273.91M |
| Financing Cash Flow | -513.32M | -492.94M | -329.07M | -250.59M | -240.46M | -459.06M |
Houlihan Lokey Technical Analysis
Positive
129.04
Price Trends
130.43
Positive
132.74
Negative
144.17
Negative
Market Momentum
0.36
Negative
54.82
Neutral
72.99
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 129.04 is above the 20-day moving average (MA) of 128.67, below the 50-day MA of 130.43, and below the 200-day MA of 144.17, indicating a neutral trend. The MACD of 0.36 indicates Negative momentum. The RSI at 54.82 is Neutral, neither overbought nor oversold. The STOCH value of 72.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLI.
Houlihan Lokey Risk Analysis
Houlihan Lokey disclosed 28 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $9.60B | 22.67 | 17.54% | 1.89% | 1.59% | -1.40% | |
72 Outperform | $3.81B | 16.58 | 71.16% | 0.67% | 22.91% | 21.48% | |
69 Neutral | $10.04B | 8.55 | 16.46% | 1.98% | 8.19% | 51.30% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $4.73B | 14.71 | 22.90% | 2.99% | 32.10% | 40.51% | |
65 Neutral | $776.89M | 8.81 | 19.97% | 12.22% | ― | ― | |
53 Neutral | $1.50B | <0.01 | 1.40% | 2.95% | 14.26% | -66.36% |
* Financial Sector Average
HLI
Houlihan Lokey
137.38
-57.59
-29.54%
PIPR
Piper Sandler
66.96
-12.52
-15.75%
SF
Stifel Financial
66.88
-10.14
-13.16%
PJT
PJT Partners
148.87
-18.98
-11.31%
AMTD
AMTD IDEA Group
20.30
-43.30
-68.08%
BRBI
BRBI BR Partners S.A. Sponsored ADR
8.25
-5.24
-38.83%
Houlihan Lokey Corporate Events
Executive/Board Changes
Houlihan Lokey Announces Immediate Resignation of Board Member
Neutral
Oct 5, 2026
On October 2, 2026, Houlihan Lokey, Inc. announced that Todd J. Carter resigned from its board of directors, with the resignation taking effect immediately. The company stated that Carter’s departure did not stem from any disagreement over o...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
Houlihan Lokey Announces Legal Leadership Transition and Governance
Positive
Sep 22, 2026
At its September 16, 2026 annual meeting, Houlihan Lokey shareholders approved a Second Amended and Restated 2016 Incentive Award Plan, expanding the share pool to 12 million, reinstating but reducing the automatic annual share increase to 1%, and...
Executive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
Houlihan Lokey Announces Routine Board Succession Change
Neutral
Sep 8, 2026
On September 3, 2026, Houlihan Lokey, Inc. disclosed that director Gillian B. Zucker informed the board she will not stand for reelection when her term ends at the company’s 2026 Annual Meeting of Stockholders. The company noted that Zucker&...
Business Operations and StrategyRegulatory Filings and Compliance
Houlihan Lokey Files New Shelf for Share Resales
Neutral
Aug 13, 2026
On August 13, 2026, Houlihan Lokey filed a prospectus supplement with the SEC covering the potential resale of 255,422 shares of Class A common stock issuable upon conversion of Class B shares held by former members of Waller Helms Advisors, acqui...
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.