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Houlihan Lokey
(NYSE:HLI)
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Rating:71Outperform
Price Target:
$147.00
▲(13.92% Upside)
Action:Upgraded
Date:09/23/26
The score is driven primarily by strong financial health (solid margins, low leverage, and good cash conversion) but tempered by cyclical variability and weaker recent cash flow growth. Technicals are neutral-to-weak with the stock well below its 200-day average, while valuation is reasonable with a ~2% yield. The latest earnings call supports medium-term confidence via record pipeline and discipline, but near-term revenue headwinds and macro-driven deal delays remain meaningful.
Positive Factors
Healthy profitability and earnings quality
Strong operating and net margins show that Houlihan Lokey converts advisory activity into meaningful profitability. Free cash flow near net income further supports earnings quality, giving the firm internal capacity to invest, retain talent, and withstand normal fluctuations in transaction volumes.
Negative Factors
Corporate Finance revenue contraction
The sharp Corporate Finance decline indicates that Houlihan Lokey remains exposed to delayed or smaller M&A transactions, particularly because larger-fee engagements were postponed. Persistent weakness would pressure revenue and earnings even if transaction counts remain stable.
Read all positive and negative factors
Positive Factors
Negative Factors
Healthy profitability and earnings quality
Strong operating and net margins show that Houlihan Lokey converts advisory activity into meaningful profitability. Free cash flow near net income further supports earnings quality, giving the firm internal capacity to invest, retain talent, and withstand normal fluctuations in transaction volumes.
Read all positive factors
Houlihan Lokey (HLI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.18B
Dividend Yield1.98%
Average Volume (3M)804.97K
Price to Earnings (P/E)21.6
Beta (1Y)0.97
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. Volume664,602
30 Day Avg. Volume804,970
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 Cap0.97
Enterprise Value/Revenue3.54
Enterprise Value/Gross Profit6.96
Enterprise Value/Ebitda15.01
Forecast
1Y Price Target
$155.50Price Target Upside20.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)6.95
Revenue Forecast (FY)$2.63B
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 client engagements, with revenue recognized when advisory services are performed and transactions or milestones are achieved. Its key revenue streams are: (1) Corporate Fi...
Houlihan Lokey Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Neutral
The call balanced meaningful near-term challenges — notably a 24% decline in Corporate Finance revenue and a ~54% drop in technology-related revenue — with offsetting strengths such as overall profitability (adjusted EPS $1.35), FVA growth (+13% revenue, +9% fee events), a healthy restructuring outlook, record backlog/pipeline metrics, stable compensation discipline (61.5% ratio), active M&A/talent strategy, and continued investment in AI and data capabilities. Management framed the results as a temporary disruption tied to identifiable macro factors and emphasized that most delayed transactions remain in the pipeline, supporting medium-term confidence.Positive Updates
Quarterly Revenue and EPS
Total revenues of $511 million and adjusted EPS of $1.35 for Q1 fiscal 2027, demonstrating continued profitability despite near-term headwinds.
Negative Updates
Corporate Finance Revenue Decline
Corporate Finance revenues were $303 million, down 24% year-over-year. Although closed transactions were flat at 127, the average transaction fee on closed deals decreased significantly as larger fee deals were disproportionately delayed.
Read all updates
Q1-2027 Updates
Positive
Negative
Quarterly Revenue and EPS
Total revenues of $511 million and adjusted EPS of $1.35 for Q1 fiscal 2027, demonstrating continued profitability despite near-term headwinds.
Read all positive updates
Company Guidance
Management's guidance and targets emphasized operational stability and specific fiscal-year targets alongside quarter metrics: Q1 results were revenue $511M and adjusted EPS $1.35, with Corporate Finance revenues $303M (‑24% YoY) on 127 closed transactions (flat YoY) and lower average fees, Financial Restructuring $119M with 23 closed transactions (‑34% YoY) and higher average fees, and Financial & Valuation Advisory $89M (+13% YoY) with 1,042 fee events (+9% YoY vs 957). For fiscal 2027 they reaffirm a long‑term adjusted compensation expense ratio target of 61.5% (Q1 61.5% vs 61.5% prior year), expect adjusted non‑compensation expense growth for the year similar to last year (Q1 non‑comp $100M, +6% vs $94M), and forecast a full‑year adjusted effective tax rate of 26–28% (Q1 ETR 13% vs ‑1% prior year). They also said restructuring should be a solid, elevated year, noted record backlog/pipeline/new‑mandate levels in Corporate Finance, expect the Intrepid acquisition to close by end of Q2 adding 32 colleagues, and reported ~1.3M shares issued and ~1.1M repurchased (≈800k withheld, ≈300k via repurchase).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
130.21
Positive
132.89
Negative
144.65
Negative
Market Momentum
0.03
Negative
53.10
Neutral
73.18
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 128.35, below the 50-day MA of 130.21, and below the 200-day MA of 144.65, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.10 is Neutral, neither overbought nor oversold. The STOCH value of 73.18 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 | $3.60B | 15.69 | 71.16% | 0.71% | 22.91% | 21.48% | |
71 Outperform | $9.18B | 21.56 | 17.78% | 1.98% | 1.59% | -1.40% | |
69 Neutral | $10.01B | 8.53 | 16.46% | 1.99% | 8.19% | 51.30% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $4.57B | 14.20 | 22.90% | 3.09% | 32.10% | 40.51% | |
65 Neutral | $835.91M | 14.70 | 19.97% | 6.70% | ― | ― | |
53 Neutral | $1.51B | 0.11 | 1.40% | 2.95% | 14.26% | -66.36% |
* Financial Sector Average
HLI
Houlihan Lokey
131.31
-67.47
-33.94%
PIPR
Piper Sandler
64.63
-20.89
-24.43%
SF
Stifel Financial
66.68
-11.32
-14.51%
PJT
PJT Partners
140.94
-40.46
-22.31%
AMTD
AMTD IDEA Group
25.56
-39.84
-60.92%
BRBI
BRBI BR Partners S.A. Sponsored ADR
15.06
1.55
11.46%
Houlihan Lokey Corporate Events
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.