Houlihan Lokey (NYSE:HLI) Posts Quarterly 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 earnings per share for the quarter, missing the consensus estimate of $1.64 by ($0.29), Zacks reports. The firm had revenue of $511.00 million during the quarter, compared to analysts’ expectations of $602.38 million. Houlihan Lokey had a net margin of 16.26% and a return on equity of 22.88%. The firm’s revenue was down 15.6% on a year-over-year basis. During the same period in the previous year, the firm earned $2.14 EPS.

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 11.1%

Shares of Houlihan Lokey stock traded down $15.47 during trading on Thursday, hitting $123.61. 1,799,845 shares of the company were exchanged, compared to its average volume of 684,374. Houlihan Lokey has a fifty-two week low of $112.83 and a fifty-two week high of $211.78. The firm has a 50 day moving average price of $140.38 and a 200 day moving average price of $152.70. The stock has a market capitalization of $8.54 billion, a price-to-earnings ratio of 19.96, a P/E/G ratio of 1.23 and a beta of 0.95.

Houlihan Lokey Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st will be given a $0.70 dividend. The ex-dividend date is Tuesday, September 1st. This represents a $2.80 annualized dividend and a dividend yield of 2.3%. Houlihan Lokey’s dividend payout ratio is currently 45.02%.

Key Headlines Impacting Houlihan Lokey

Here are the key news stories impacting Houlihan Lokey this week:

• Positive Sentiment: Keefe, Bruyette & Woods maintained an “outperform” rating on HLI and sees potential upside from current levels, although it lowered its price target to $153 from $160. Benzinga analyst price-target update
• Positive Sentiment: Houlihan Lokey declared a quarterly dividend of $0.70 per share, payable September 15 to shareholders of record as of September 1. The dividend implies an annualized yield of approximately 2.3%, providing ongoing income support for investors.
• Neutral Sentiment: Management’s first-quarter fiscal 2027 earnings call and results release provide additional detail on the quarter’s performance and outlook. Houlihan Lokey Reports First Quarter Fiscal 2027 Financial Results Houlihan Lokey Q1 2027 Earnings Call Transcript
• Negative Sentiment: HLI reported quarterly EPS of $1.35, well below the $1.64 analyst consensus and down from $2.14 a year earlier. Houlihan Lokey misses first-quarter earnings and revenue estimates
• Negative Sentiment: Revenue was $511 million, versus the $602.38 million consensus estimate, and declined 15.6% year over year. The substantial top-line shortfall and earnings deterioration are the primary reasons investors are selling the stock.

Wall Street Analysts Forecast Growth

A number of equities research analysts have weighed in on HLI shares. UBS Group lifted their price objective on Houlihan Lokey from $160.00 to $161.00 and gave the company a “neutral” rating in a report on Wednesday, July 8th. Weiss Ratings reiterated a “hold (c)” rating on shares of Houlihan Lokey in a research report on Friday, July 17th. The Goldman Sachs Group set a $148.00 price target on shares of Houlihan Lokey in a research note on Thursday. Zacks Research raised shares of Houlihan Lokey from a “strong sell” rating to a “hold” rating in a report on Thursday, June 11th. Finally, US Capital Advisors set a $187.00 price target on Houlihan Lokey in a research note on Thursday, July 9th. Five investment analysts have rated the stock with a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus price target of $177.62.

Insiders Place Their Bets

In other news, Chairman Scott L. Beiser sold 6,265 shares of the business’s stock in a transaction on Thursday, May 21st. The stock was sold at an average price of $150.26, for a total value of $941,378.90. Following the completion of the transaction, the chairman directly owned 6,265 shares of the company’s stock, valued at $941,378.90. The trade was a 50.00% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Insiders own 22.83% of the company’s stock.

Institutional Investors Weigh In On Houlihan Lokey

Hedge funds and other institutional investors have recently modified their holdings of the company. Royal Bank of Canada raised its holdings in Houlihan Lokey by 14.4% in the 1st quarter. Royal Bank of Canada now owns 49,584 shares of the financial services provider’s stock valued at $8,008,000 after acquiring an additional 6,253 shares during the last quarter. AQR Capital Management LLC increased its position in Houlihan Lokey by 50.0% during the 1st quarter. AQR Capital Management LLC now owns 29,654 shares of the financial services provider’s stock worth $4,598,000 after purchasing an additional 9,891 shares in the last quarter. Millennium Management LLC purchased a new position in shares of Houlihan Lokey in the 1st quarter valued at $18,964,000. Goldman Sachs Group Inc. lifted its stake in shares of Houlihan Lokey by 5.7% during the first quarter. Goldman Sachs Group Inc. now owns 415,743 shares of the financial services provider’s stock worth $67,143,000 after purchasing an additional 22,553 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership purchased a new position in Houlihan Lokey in the 2nd quarter worth approximately $1,033,000. 78.07% of the stock is currently owned by hedge funds and other institutional investors.

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.