Houlihan Lokey (NYSE:HLI) Announces Earnings Results, Misses Expectations By $0.29 EPS

Houlihan Lokey (NYSE:HLI) issued its earnings results on Wednesday. The financial services provider reported $1.35 EPS for the quarter, missing analysts’ consensus estimates of $1.64 by ($0.29), Zacks reports. Houlihan Lokey had a net margin of 16.26% and a return on equity of 22.88%.

Here are the key takeaways from Houlihan Lokey’s conference call:

• First-quarter results were weak: Revenue was $511 million and adjusted EPS was $1.35, with Corporate Finance revenue down 24% year over year to $303 million. Deal closings were delayed by geopolitical uncertainty, consumer-sector weakness, and disruption in software valuations, disproportionately affecting larger-fee transactions.
• Management characterized the Corporate Finance slowdown as a temporary delay rather than a structural deterioration. Backlog, pipeline, and new mandate activity remain at record levels, but executives cautioned that persistent Middle East-related uncertainty makes the timing of a broader middle-market recovery difficult to predict.
• Financial and Valuation Advisory revenue increased 13% to $89 million, supported by growth across all three service lines and strong large-cap activity. Financial Restructuring revenue was $119 million, and management expects elevated restructuring activity to continue amid energy-market volatility, private-credit dislocation, and software-sector stress.
• Houlihan Lokey expects to close its acquisition of energy-sector investment bank Intrepid Financial Partners by the end of the second fiscal quarter, adding 32 employees. The company also reported a robust acquisition and senior-talent pipeline and said it remains committed to strategic expansion despite near-term revenue pressure.

Houlihan Lokey Price Performance

Shares of NYSE HLI traded down $6.64 during trading hours on Wednesday, hitting $138.83. 870,278 shares of the stock were exchanged, compared to its average volume of 676,851. Houlihan Lokey has a one year low of $130.72 and a one year high of $211.78. The company’s 50 day moving average is $140.59 and its 200 day moving average is $153.00. The firm has a market capitalization of $9.59 billion, a P/E ratio of 22.32, a P/E/G ratio of 1.20 and a beta of 0.95.

Houlihan Lokey Increases Dividend

The company also recently disclosed a quarterly dividend, which was paid on Monday, June 15th. Investors of record on Monday, June 1st were issued a dividend of $0.70 per share. The ex-dividend date of this dividend was Monday, June 1st. This represents a $2.80 annualized dividend and a dividend yield of 2.0%. This is an increase from Houlihan Lokey’s previous quarterly dividend of $0.60. Houlihan Lokey’s payout ratio is currently 45.02%.

Insider Buying and Selling

In related news, Chairman Scott L. Beiser sold 6,265 shares of Houlihan Lokey stock in a transaction on Thursday, May 21st. The shares were sold at an average price of $150.26, for a total value of $941,378.90. Following the transaction, the chairman owned 6,265 shares in the company, valued at $941,378.90. This trade represents a 50.00% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. 22.83% of the stock is owned by company insiders.

Institutional Investors Weigh In On Houlihan Lokey

Hedge funds and other institutional investors have recently made changes to their positions in the business. Marex Group plc acquired a new position in shares of Houlihan Lokey during the 4th quarter worth about $262,000. Vise Technologies Inc. boosted its holdings in Houlihan Lokey by 10.9% in the 3rd quarter. Vise Technologies Inc. now owns 1,234 shares of the financial services provider’s stock valued at $253,000 after purchasing an additional 121 shares during the period. Blair William & Co. IL acquired a new stake in Houlihan Lokey in the 3rd quarter worth $251,000. Lido Advisors LLC grew its position in Houlihan Lokey by 11.7% in the 4th quarter. Lido Advisors LLC now owns 1,207 shares of the financial services provider’s stock worth $210,000 after purchasing an additional 126 shares during the last quarter. Finally, Coldstream Capital Management Inc. bought a new position in shares of Houlihan Lokey during the 3rd quarter worth about $208,000. 78.07% of the stock is owned by institutional investors and hedge funds.

Analyst Ratings Changes

HLI has been the topic of a number of research reports. Wolfe Research upgraded Houlihan Lokey from an “underperform” rating to a “peer perform” rating in a report on Thursday, July 9th. The Goldman Sachs Group set a $164.00 target price on shares of Houlihan Lokey in a research report on Friday, July 10th. Keefe, Bruyette & Woods dropped their price target on shares of Houlihan Lokey from $172.00 to $160.00 and set an “outperform” rating on the stock in a research note on Friday, July 10th. Morgan Stanley cut their price target on shares of Houlihan Lokey from $193.00 to $187.00 and set an “overweight” rating on the stock in a report on Thursday, July 9th. Finally, US Capital Advisors set a $187.00 target price on shares of Houlihan Lokey in a research report on Thursday, July 9th. Five investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the company. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $180.50.

About Houlihan Lokey

Houlihan Lokey, Inc is a global investment bank and financial services firm founded in 1972 and headquartered in Los Angeles, California. The company specializes in advisory services across a broad range of transaction types and financial matters. Since its founding, Houlihan Lokey has grown to serve corporations, financial sponsors, and government entities worldwide, providing expertise in complex and high-stakes engagements.

The firm’s core service offerings include mergers and acquisitions advisory, capital markets advisory, financial restructuring and distressed M&A, and valuation and fairness opinions.