Start here if you're new
what it is
Houlihan Lokey is an investment bank that gets paid to advise on deals, debt fixes, and restructurings.
how it gets paid
Last year Houlihan Lokey made $2.4B in revenue. Corporate finance was the main engine at $1.53B, or 64% of sales.
why it's growing
Revenue grew 24.8% last year. The company maintains a strong balance sheet and ample liquidity.
what just happened
Consensus had EPS at $1.94 versus $1.95 expected, so the quarter missed by 0.5%.
At a glance
A balance sheet — strong enough to weather a downturn
60/100 earnings predictability — reasonably predictable
23.8x trailing p/e — priced about right
1.4% dividend yield — cash in your pocket every quarter
23.0% return on capital — every dollar works hard here
xvary composite: 72/100 — average
What they do
Houlihan Lokey is an investment bank that gets paid to advise on deals, debt fixes, and restructurings.
M&A → deal making → that pays the bills. Financial restructuring → debt fixes → that gets busy when borrowers panic. You are paying for 1,690 employees and about 1,000 clients a year, so one good relationship can turn into repeat fees.
How they make money
$2.4B
annual revenue · their business grew +24.8% last year
Corporate finance
$1.53B
+38%
Financial restructuring
$0.54B
+4%
Financial and valuation advisory
$0.32B
+11%
The products that matter
advisory franchise
Corporate Finance
$2.4B revenue base
the snapshot does not break out each advisory line. what you do know is the firm produced $2.4B in annual revenue and grew 24.8% last year as transaction activity improved. one franchise still drives the page.
core revenue engine
Key numbers
23.8x
trailing p/e
You are paying 23.8 times last year's profit for a firm with a 23.5% operating margin.
$224
target price
That target sits 26% above the current price of $178.31.
23.5%
operating margin
Almost a quarter of revenue becomes operating profit. That is a real fee machine.
23.0%
return on capital
They earn 23 cents for every dollar they put to work. That explains the premium.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 2 — safer than 80% of stocks
- price stability 75 / 100
- net profit margin 18.0% — keeps 18 cents of every dollar in revenue
- return on equity 23% — $0.23 profit for every $1 investors have put in
A with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in HLI 3 years ago → it's now worth $21,120.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
Consensus had EPS at $1.94 versus $1.95 expected, so the quarter missed by 0.5%.
EDGAR also showed $2.0B of revenue and a 32.4% gross margin. The filing's $4.74 EPS figure does not line up with Yahoo Finance's $1.94 consensus print, so the market read it as a miss.
$2.0B
revenue
$1.94
eps
32.4%
gross margin
the number that mattered
EPS at $1.94 missed by 0.5%, which matters more than the big revenue number when investors price the stock.
-
houlihan lokey delivered solid operating results in the fiscal second quarter, even though the stock has pulled back nearly 15% in value since our last report. (fiscal years end march 31st.) revenue rose nearly 15% vs. prior year, to $659.5 million, modestly ahead of expectations, while earnings of $1.63 per share landed roughly in line with estimates.the corporate finance unit remained the primary growth driver, supported by healthy transaction volumes, while financial advisory and restructuring provided incremental contributions. overall activity levels point to a constructive deal environment, though results were not as outsized as those seen earlier in the fiscal year.
-
the setup into the back half of fiscal 2025 appears more balanced.
-
management continues to highlight open capital markets and solid client engagement.
-
corporate finance should remain the largest contributor, and the firm’s disciplined expense management and deep bench of senior bankers continue to support consistent execution across cycles.this diversified revenue mix provides added visibility as activity levels continue to broaden across advisory lines.
-
houlihan lokey remains shareholder friendly.the company maintains a strong balance sheet and ample liquidity, supporting steady dividend growth and opportunistic repurchases.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
houlihan lokey does not sell products that renew automatically. it sells advice. if boards stop transacting, the fee pool cools fast and the whole $2.4B revenue base feels it.
med
deal activity slows again
M&A and financing activity drive the fee pool. If transaction volumes cool, the firm's $2.4B revenue base feels it directly.
Impact: this is the main engine, not a side segment. A softer market pressures both revenue growth and the multiple investors are willing to pay.
med
senior banker retention gets expensive
Advisory is a people business. If rainmakers leave, mandates and client relationships can leave with them.
Impact: the current 16.0% net margin has less room to hold up if compensation rises to keep talent in place.
med
the multiple stops forgiving cyclical noise
The stock trades at 23.8x trailing earnings. That is fine for a strong franchise, but less generous if growth cools after a 24.8% rebound year.
Impact: even decent operating results can lead to weak stock performance if the market decides quality already has a full price tag.
if revenue slips back while the stock still holds a premium multiple, you get hit twice — on earnings and on what investors are willing to pay for them.
source: institutional data · regulatory filings · risk analysis
Pay attention to
key metric
whether $2.4B was a floor or a peak for now
Last year delivered 24.8% growth on a $2.4B base. If that pace fades hard, the premium multiple gets much harder to defend.
earnings
quarterly EPS follow-through
FY2025 EPS moved from $1.42 to $2.50 by the final quarter. You want that improvement to hold, not roll back.
risk
deal market openness
Management says capital markets are open and client engagement is solid. If that tone changes, the revenue story changes with it.
ownership
institutional flow stays slightly negative
There were 254 buyers versus 266 sellers in 3Q2025. Not dramatic, but not accumulation either.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts see a normal setup, not a strong short-term signal.
risk profile
above average
stability score 2 — safer than roughly 80% of stocks. You still own a cyclical business, just not a fragile one.
chart momentum
top 20%
technical score 2 — the stock has stronger relative momentum than most names right now. The chart is helping the fundamental story.
earnings predictability
60 / 100
earnings predictability sits in the middle. Advisory fees arrive in bunches, so you should expect some quarter-to-quarter noise.
source: institutional data
Institutional activity
254 buyers vs. 266 sellers in 3q2025. total institutional holdings: 54.4M shares.
source: institutional data
Price targets
3-5 year target range
$150
$298
$178
current price
$224
target midpoint · +26% from current · 3-5yr high: $205 (+15% · 5% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive