📊 HLI Key Takeaways
Is Houlihan Lokey, Inc.. (HLI) a Good Investment?
Houlihan Lokey demonstrates exceptional financial health with strong operating margins (20.1%), outstanding cash generation ($681.8M free cash flow, 26% FCF margin), and a fortress balance sheet (0.06x debt/equity). However, net income growth (+0.4% YoY) significantly lags revenue growth (+9.5% YoY), signaling potential margin compression or rising operational costs that require monitoring before recommending increased exposure.
Robust, asset-light profitability with 20% operating margins, double‑digit ROE on minimal leverage, and strong cash generation (near 20% FCF margin) indicate high-quality fundamentals. A net cash balance sheet adds resilience and capital allocation flexibility, while EPS growth outpaced earnings, suggesting accretive buybacks. With net income flat and revenue growth unclear, execution on sustained advisory activity and margin discipline is key.
Why Buy Houlihan Lokey, Inc.. Stock? HLI Key Strengths
- Exceptional cash generation with $681.8M free cash flow and 26% FCF margin, demonstrating sustainable earnings quality
- Fortress balance sheet with minimal leverage (0.06x debt/equity) and $1.2B cash reserves (28% of total assets)
- Consistent high profitability with 20.1% operating margin and 18.2% ROE, indicating efficient capital deployment
- Solid 9.5% revenue growth in investment advisory services sector
- Operating cash flow ($704.1M) substantially exceeds net income ($425.7M), showing low working capital requirements
- Net cash balance sheet with low leverage (Debt/Equity 0.06x)
- Strong profitability and returns (20.3% operating margin, 16.4% net margin, 14.2% ROE)
- Excellent cash conversion and low capex driving 19.9% FCF margin
HLI Stock Risks: Houlihan Lokey, Inc.. Investment Risks
- Net income growth (+0.4% YoY) significantly underperforming revenue growth (+9.5% YoY) indicates margin compression or cost escalation
- Investment advisory services sector is cyclical and sensitive to M&A deal flow, capital markets activity, and economic conditions
- Elevated insider trading activity (19 Form 4 filings in 90 days) warrants scrutiny for potential concerns or portfolio rebalancing
- Revenue cyclicality tied to deal/M&A environment may pressure fees
- Compensation and competitive pressure could compress margins
- Flat net income suggests limited near-term organic growth momentum
Key Metrics to Watch
- Net margin trend and margin bridge analysis to identify source of net income growth lag
- Operating leverage and compensation-to-revenue ratio to assess cost structure efficiency
- Free cash flow sustainability and cash conversion rate relative to net income
- Deal flow indicators and M&A transaction volume in forward guidance
- Revenue YoY growth
- Operating margin sustainability
Houlihan Lokey, Inc.. (HLI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 26.0% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
HLI Profit Margin, ROE & Profitability Analysis
HLI vs Market Sector: How Houlihan Lokey, Inc.. Compares
How Houlihan Lokey, Inc.. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Houlihan Lokey, Inc.. Stock Overvalued? HLI Valuation Analysis 2026
Based on fundamental analysis, Houlihan Lokey, Inc.. has mixed fundamental signals relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Houlihan Lokey, Inc.. Balance Sheet: HLI Debt, Cash & Liquidity
HLI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Houlihan Lokey, Inc..'s revenue has grown significantly by 15% over the 5-year period, indicating strong business expansion. The most recent EPS of $4.11 reflects profitable operations.
HLI Revenue Growth, EPS Growth & YoY Performance
HLI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $634.4M | $95.3M | $1.39 |
| Q2 2026 | $575.0M | $93.5M | $1.37 |
| Q1 2026 | $513.6M | $88.9M | $1.30 |
| Q3 2025 | $511.1M | $70.8M | $1.04 |
| Q2 2025 | $467.0M | $67.0M | $0.99 |
| Q1 2025 | $415.8M | $61.4M | $0.90 |
| Q2 2024 | $456.5M | $60.7M | $0.87 |
| Q1 2024 | $415.8M | $61.4M | $0.90 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Houlihan Lokey, Inc.. Dividends, Buybacks & Capital Allocation
HLI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Houlihan Lokey, Inc.. (CIK: 0001302215)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HLI
What is the AI rating for HLI?
Houlihan Lokey, Inc.. (HLI) has a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 73% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are HLI's key strengths?
Claude: Exceptional cash generation with $681.8M free cash flow and 26% FCF margin, demonstrating sustainable earnings quality. Fortress balance sheet with minimal leverage (0.06x debt/equity) and $1.2B cash reserves (28% of total assets). ChatGPT: Net cash balance sheet with low leverage (Debt/Equity 0.06x). Strong profitability and returns (20.3% operating margin, 16.4% net margin, 14.2% ROE).
What are the risks of investing in HLI?
Claude: Net income growth (+0.4% YoY) significantly underperforming revenue growth (+9.5% YoY) indicates margin compression or cost escalation. Investment advisory services sector is cyclical and sensitive to M&A deal flow, capital markets activity, and economic conditions. ChatGPT: Revenue cyclicality tied to deal/M&A environment may pressure fees. Compensation and competitive pressure could compress margins.
What is HLI's revenue and growth?
Houlihan Lokey, Inc.. reported revenue of $2.6B.
Does HLI pay dividends?
Houlihan Lokey, Inc.. pays dividends, with $174.0M distributed to shareholders in the trailing twelve months.
Where can I find HLI SEC filings?
Official SEC filings for Houlihan Lokey, Inc.. (CIK: 0001302215) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HLI's EPS?
Houlihan Lokey, Inc.. has a diluted EPS of $6.22.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is HLI a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Houlihan Lokey, Inc.. has a BUY rating with 73% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is HLI stock overvalued or undervalued?
Valuation metrics for HLI: ROE of 18.2% (sector avg: 15%), net margin of 16.3% (sector avg: 12%). Higher ROE suggests strong returns relative to peers.
Should I buy HLI stock in 2026?
Our dual AI analysis gives Houlihan Lokey, Inc.. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is HLI's free cash flow?
Houlihan Lokey, Inc..'s operating cash flow is $704.1M, with capital expenditures of $22.3M. FCF margin is 26.0%.
How does HLI compare to other Market stocks?
Vs Default sector averages: Net margin 16.3% (avg: 12%), ROE 18.2% (avg: 15%), current ratio N/A (avg: 1.8).