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

Houlihan Lokey (NYSE:HLI) posted its quarterly earnings results on Wednesday. The financial services provider reported $1.35 earnings per share 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%. During the same period in the previous year, the company earned $2.14 earnings per share. Houlihan Lokey’s revenue was down 15.6% compared to the same quarter last year.

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 Stock Down 4.6%

Shares of Houlihan Lokey stock traded down $6.64 during trading on Wednesday, hitting $138.83. 870,278 shares of the company were exchanged, compared to its average volume of 859,108. Houlihan Lokey has a fifty-two week low of $130.72 and a fifty-two week high of $211.78. The firm has a 50 day moving average price of $140.59 and a 200 day moving average price of $153.00. The stock has a market capitalization of $9.59 billion, a price-to-earnings ratio of 19.27, a P/E/G ratio of 1.23 and a beta of 0.95.

Houlihan Lokey Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Monday, June 15th. Investors of record on Monday, June 1st were given a dividend of $0.70 per share. The ex-dividend date 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 presently 45.02%.

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on the company. Zacks Research raised Houlihan Lokey from a “strong sell” rating to a “hold” rating in a report on Thursday, June 11th. Morgan Stanley cut their price target on shares of Houlihan Lokey from $193.00 to $187.00 and set an “overweight” rating for the company in a report on Thursday, July 9th. Weiss Ratings reiterated a “hold (c)” rating on shares of Houlihan Lokey in a research note on Friday, July 17th. Bank of America began coverage on shares of Houlihan Lokey in a research report on Friday, July 10th. They set a “buy” rating and a $164.00 target price on the stock. Finally, Wolfe Research raised shares of Houlihan Lokey from an “underperform” rating to a “peer perform” rating in a report on Thursday, July 9th. Five investment analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average price target of $180.50.

Insider Activity

In related news, Chairman Scott L. Beiser sold 6,265 shares of the stock in a transaction on Thursday, May 21st. The stock was sold at an average price of $150.26, for a total transaction of $941,378.90. Following the sale, the chairman owned 6,265 shares of the company’s stock, valued at $941,378.90. This trade represents a 50.00% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 22.83% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Strategic Wealth Investment Group LLC purchased a new stake in Houlihan Lokey in the second quarter valued at approximately $39,000. CIBC Private Wealth Group LLC raised its stake in Houlihan Lokey by 177.0% during the fourth quarter. CIBC Private Wealth Group LLC now owns 277 shares of the financial services provider’s stock worth $48,000 after purchasing an additional 177 shares during the period. Quarry LP purchased a new position in Houlihan Lokey during the fourth quarter worth approximately $90,000. AlphaCentric Advisors LLC acquired a new position in shares of Houlihan Lokey in the 4th quarter valued at $150,000. Finally, Northwestern Mutual Wealth Management Co. boosted its holdings in shares of Houlihan Lokey by 7.9% in the 3rd quarter. Northwestern Mutual Wealth Management Co. now owns 956 shares of the financial services provider’s stock valued at $196,000 after purchasing an additional 70 shares during the last quarter. Institutional investors and hedge funds own 78.07% of the company’s stock.

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.