Houlihan Lokey (HLI)
Market Price (12/20/2025): $176.11 | Market Cap: $11.8 BilSector: Financials | Industry: Investment Banking & Brokerage
Houlihan Lokey (HLI)
Market Price (12/20/2025): $176.11Market Cap: $11.8 BilSector: FinancialsIndustry: Investment Banking & Brokerage
Investment Highlights
Why It Matters
Which of these 2 stories sounds closer for this stock?
1. Generates cash flow
The stock generated 4% or more of the share price (called cash flow yield), and shows moderate 10-15% or more growth.
2. Riding a trend
Think Tesla during the pandemic of 2020 when EVs were riding a cultural high, or Nvidia in the current AI boom, or even Figma. These companies don’t have enough yield, or, enough growth, or both - however - they are riding a trend. They have momentum. These can be more volatile - they don’t have the floor of strong cash flow
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.0%, FCF Yield is 6.6% | Key risksHLI key risks include [1] its heavy reliance on attracting and retaining key talent, Show more. |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 32%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 31% | |
| Low stock price volatilityVol 12M is 29% | |
| Megatrend and thematic driversMegatrends include Digital & Alternative Assets. Themes include Private Equity, Private Credit, and Venture Capital. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.0%, FCF Yield is 6.6% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 32%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 31% |
| Low stock price volatilityVol 12M is 29% |
| Megatrend and thematic driversMegatrends include Digital & Alternative Assets. Themes include Private Equity, Private Credit, and Venture Capital. |
| Key risksHLI key risks include [1] its heavy reliance on attracting and retaining key talent, Show more. |
Valuation, Metrics & Events
HLI Stock
Why The Stock Moved
Qualitative Assessment
AI Generated Analysis | Feedback
Here are five key points highlighting why Houlihan Lokey (HLI) stock moved by approximately -10.8% between August 31, 2025, and December 20, 2025:
**1. Market Adjustment and Valuation Concerns:** Despite strong financial results reported for its fiscal quarters, including Q2 FY2026 which exceeded expectations, the stock may have experienced a market adjustment or profit-taking from previous highs. The 52-week high for HLI was $211.78, and the stock traded around $176.32 by December 18, 2025, indicating a significant decline from its peak. This could suggest that even with good performance, the market re-evaluated its valuation.
**2. Increased Operating Expenses and Tax Rate:** Financial reports from earlier in the fiscal year, such as Q3 FY2025 (reported January 28, 2025), highlighted increased adjusted compensation expenses and a higher adjusted effective tax rate as negative factors. These ongoing operational costs, while the company still reported strong net income, might have tempered investor enthusiasm regarding profitability margins in the long term. Adjusted compensation expenses continued to rise in Q2 FY2026.
**3. Slower Growth in Specific Business Segments:** While overall revenue growth was robust, some segments exhibited slower growth. For instance, the Financial Restructuring segment saw only a 2% year-over-year increase in revenue during Q3 FY2025. Although overall performance remained strong due to other segments, a perceived lack of uniform high growth across all business lines could have influenced investor sentiment.
**4. General Macroeconomic Headwinds and M&A Market Sentiment:** Even as Houlihan Lokey's management expressed optimism for fiscal year 2026, their guidance also acknowledged potential challenges from "macroeconomic pressures and interest rate fluctuations". A broader cautious sentiment within the M&A and financial advisory market, despite HLI's outperformance, might have led to a re-rating of stocks in the sector.
**5. Mixed Analyst Sentiment and Price Target Adjustments:** During the period, while some analysts maintained "Buy" ratings or raised price targets, others initiated coverage with "Hold" ratings (e.g., UBS on December 11, 2025, with a $193 target; Deutsche Bank on October 9, 2025, with a $210 target). Additionally, one analyst firm, Keefe Bruyette, slightly lowered its price target from $230 to $228 on December 17, 2025, while still maintaining an "Outperform" rating. These actions, even if not outright downgrades, could contribute to a more cautious outlook among investors.
Stock Movement Drivers
Return vs. Risk
Price Returns Compared
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| HLI Return | 41% | 57% | -14% | 41% | 47% | 3% | 305% |
| Peers Return | 21% | 40% | -9% | 23% | 55% | 15% | 236% |
| S&P 500 Return | 16% | 27% | -19% | 24% | 23% | 16% | 112% |
Monthly Win Rates [3] | |||||||
| HLI Win Rate | 75% | 58% | 42% | 67% | 67% | 67% | |
| Peers Win Rate | 63% | 63% | 42% | 53% | 72% | 65% | |
| S&P 500 Win Rate | 58% | 75% | 42% | 67% | 75% | 73% | |
Max Drawdowns [4] | |||||||
| HLI Max Drawdown | -6% | -5% | -27% | -2% | -5% | -18% | |
| Peers Max Drawdown | -46% | -5% | -30% | -10% | -3% | -32% | |
| S&P 500 Max Drawdown | -31% | -1% | -25% | -1% | -2% | -15% | |
[1] Cumulative total returns since the beginning of 2020
[2] Peers: SF, EVR, JEF, SEIC, AMG.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2025 data is for the year up to 12/19/2025 (YTD)
How Low Can It Go
| Event | HLI | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -37.2% | -25.4% |
| % Gain to Breakeven | 59.3% | 34.1% |
| Time to Breakeven | 518 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -20.8% | -33.9% |
| % Gain to Breakeven | 26.3% | 51.3% |
| Time to Breakeven | 9 days | 148 days |
| 2018 Correction | ||
| % Loss | -34.3% | -19.8% |
| % Gain to Breakeven | 52.2% | 24.7% |
| Time to Breakeven | 407 days | 120 days |
Compare to SF, EVR, JEF, SEIC, AMG
In The Past
Houlihan Lokey's stock fell -37.2% during the 2022 Inflation Shock from a high on 1/12/2022. A -37.2% loss requires a 59.3% gain to breakeven.
Preserve Wealth
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Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
Latest Trefis Analyses
Trade Ideas
Select past ideas related to HLI. For more, see Trefis Trade Ideas.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 11212025 | WU | Western Union | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 13.5% | 13.5% | -0.4% |
| 11212025 | COIN | Coinbase Global | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 2.0% | 2.0% | -0.5% |
| 11142025 | PYPL | PayPal | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -4.8% | -4.8% | -7.5% |
| 11142025 | V | Visa | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 5.8% | 5.8% | -2.7% |
| 11072025 | WD | Walker & Dunlop | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | -12.1% | -12.1% | -12.1% |
| 08312022 | HLI | Houlihan Lokey | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 23.4% | 38.2% | -3.7% |
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 11212025 | WU | Western Union | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 13.5% | 13.5% | -0.4% |
| 11212025 | COIN | Coinbase Global | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 2.0% | 2.0% | -0.5% |
| 11142025 | PYPL | PayPal | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -4.8% | -4.8% | -7.5% |
| 11142025 | V | Visa | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 5.8% | 5.8% | -2.7% |
| 11072025 | WD | Walker & Dunlop | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | -12.1% | -12.1% | -12.1% |
| 08312022 | HLI | Houlihan Lokey | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 23.4% | 38.2% | -3.7% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons for Houlihan Lokey
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 151.99 |
| Mkt Cap | 12.5 |
| Rev LTM | 3,054 |
| Op Inc LTM | 609 |
| FCF LTM | 854 |
| FCF 3Y Avg | 616 |
| CFO LTM | 873 |
| CFO 3Y Avg | 661 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 11.8% |
| Rev Chg 3Y Avg | 5.7% |
| Rev Chg Q | 13.4% |
| QoQ Delta Rev Chg LTM | 3.2% |
| Op Mgn LTM | 27.1% |
| Op Mgn 3Y Avg | 28.2% |
| QoQ Delta Op Mgn LTM | -0.3% |
| CFO/Rev LTM | 31.0% |
| CFO/Rev 3Y Avg | 25.2% |
| FCF/Rev LTM | 28.8% |
| FCF/Rev 3Y Avg | 23.3% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 12.5 |
| P/S | 3.8 |
| P/EBIT | 9.5 |
| P/E | 19.1 |
| P/CFO | 11.5 |
| Total Yield | 6.0% |
| Dividend Yield | 1.1% |
| FCF Yield 3Y Avg | 6.6% |
| D/E | 0.1 |
| Net D/E | -0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 8.9% |
| 3M Rtn | -3.7% |
| 6M Rtn | 25.3% |
| 12M Rtn | 15.2% |
| 3Y Rtn | 104.2% |
| 1M Excs Rtn | 6.0% |
| 3M Excs Rtn | -5.8% |
| 6M Excs Rtn | 9.6% |
| 12M Excs Rtn | -3.0% |
| 3Y Excs Rtn | 25.6% |
Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 10/31/2025 | -0.6% | 0.7% | -1.0% |
| 7/30/2025 | -0.4% | 0.3% | 4.9% |
| 5/8/2025 | -0.6% | 2.9% | 0.9% |
| 1/29/2025 | 0.2% | 2.0% | -3.6% |
| 10/31/2024 | -0.8% | 6.3% | 8.5% |
| 7/31/2024 | -1.8% | -4.1% | 2.8% |
| 5/9/2024 | 0.6% | -0.9% | -2.8% |
| 2/2/2024 | -2.1% | -0.0% | -1.2% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 12 | 16 | 12 |
| # Negative | 12 | 8 | 12 |
| Median Positive | 1.2% | 2.5% | 5.3% |
| Median Negative | -1.0% | -1.6% | -3.4% |
| Max Positive | 3.7% | 7.5% | 13.9% |
| Max Negative | -7.0% | -4.1% | -8.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 9302025 | 11042025 | 10-Q 9/30/2025 |
| 6302025 | 8052025 | 10-Q 6/30/2025 |
| 3312025 | 5152025 | 10-K 3/31/2025 |
| 12312024 | 2042025 | 10-Q 12/31/2024 |
| 9302024 | 11052024 | 10-Q 9/30/2024 |
| 6302024 | 8062024 | 10-Q 6/30/2024 |
| 3312024 | 5212024 | 10-K 3/31/2024 |
| 12312023 | 2082024 | 10-Q 12/31/2023 |
| 9302023 | 11082023 | 10-Q 9/30/2023 |
| 6302023 | 8032023 | 10-Q 6/30/2023 |
| 3312023 | 5252023 | 10-K 3/31/2023 |
| 12312022 | 2072023 | 10-Q 12/31/2022 |
| 9302022 | 11032022 | 10-Q 9/30/2022 |
| 6302022 | 8052022 | 10-Q 6/30/2022 |
| 3312022 | 5272022 | 10-K 3/31/2022 |
| 12312021 | 2082022 | 10-Q 12/31/2021 |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |