The case for & against
Bull & Bear analysis
Houlihan Lokey, Inc. (NYSE: HLI) is a leading global investment bank that specializes in financial advisory services, including mergers and acquisitions (M&A), financial restructuring, and valuation advisory. The firm operates primarily in the middle-market space, leveraging its diverse and adaptable business model to navigate the complexities of the financial landscape. Recently, the company has embarked on strategic initiatives to expand its footprint, notably enhancing capabilities in capital solutions and international markets, particularly within EMEA and Asia-Pacific.
Bull says
- ↑FY2026 revenue hit $2.6B with adjusted EPS of $7.56, up 20% YoY
- ↑Hired 33 MDs and closed strategic acquisitions, boosting EMEA and APAC presence
- ↑Q4 corporate finance revenue grew 5% YoY to $434M, showing mid-market strength
- ↑Dividend raised 17% to $0.70/share and share repurchases resumed
- ↑Robust M&A and restructuring pipelines support ~17% EPS growth forecast
- ↑Strong liquidity and high earnings yield enable AI-powered capital solutions expansion
Bear says
- ↓Financial restructuring revenue fell 3% YoY, signaling potential headwinds
- ↓Ongoing geopolitical uncertainty prolongs deal timelines and stifles activity
- ↓Analyst cuts for 2027 EPS and revenue reflect weak growth factors
- ↓Elevated short interest indicates bearish investor sentiment
- ↓High leverage exposure and declining institutional backing raise balance-sheet risks
- ↓Valuation may overshoot expectations, risking an 18–23% downside gap
Investment themes with HLI
Companies paying above-average dividends
Debt and equity trading fueling economic growth
Earnings Call · Q4 2025 · Mgmt. Guidance
Transcript signals
Bull points
- We ended the quarter with revenues of $666 million and adjusted earnings per share of $1.96. Revenues for the quarter were up 28% and adjusted earnings per share were up 54% compared to the same quarter last year.
- We ended the fiscal year 2025 with $2.4 billion in revenues, the highest annual revenue in the firm's history, up 25% versus last year.
- Both financial restructuring and financial and valuation advisory produce record revenues for the year. And our corporate finance business had its second best year ever.
Bear points
- the transaction advisory services is still ramping back up as M&A continues to be a bit muted
- It is just, it is a more difficult environment to be predicting the future.