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    Does Houlihan Lokey (HLI) Pairing Higher Earnings With Buybacks Reveal Its Core Capital Strategy?

    Simply Wall St·02/05/2026 07:28:18
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    • In late January 2026, Houlihan Lokey reported higher third-quarter net income and earnings per share year over year, declared a US$0.60 quarterly dividend, completed a US$221.73 million share repurchase program, and announced further senior hires in its European Industrials and Business Services teams.
    • These developments highlight the firm’s emphasis on capital returns to shareholders while broadening its European sector coverage in areas such as specialty distribution and IT services.
    • We’ll now examine how Houlihan Lokey’s earnings beat and expanded European advisory bench shape its investment narrative for investors.

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    What Is Houlihan Lokey's Investment Narrative?

    For Houlihan Lokey, the investment story still comes down to whether you buy into a premium-priced adviser that converts deal flow into consistent earnings and steady capital returns. The latest quarter’s higher net income and EPS, alongside a US$0.60 dividend and completion of the US$221.73 million buyback, reinforce that capital return angle, even as the share price has slipped in recent months. On the operational side, the new senior hires in European Industrials and Business Services, especially in specialty distribution and IT services, slightly tilt near term catalysts toward cross border M&A and sector specific mandates, but the impact is more incremental than transformational. The bigger swing factors remain deal volumes, fee pressure, and whether investors stay comfortable paying a relatively rich multiple for that earnings profile.

    However, one risk investors should not overlook is how quickly sentiment can shift if deal activity softens. Despite retreating, Houlihan Lokey's shares might still be trading above their fair value and there could be some more downside. Discover how much.

    Exploring Other Perspectives

    HLI 1-Year Stock Price Chart
    HLI 1-Year Stock Price Chart
    Three Simply Wall St Community fair value estimates span roughly US$170 to just over US$210 per share, underscoring how far private investors can differ. Set against HLI’s rich earnings multiple and reliance on robust deal activity, that spread invites you to weigh both upside expectations and the risk that slower transaction volumes could test today’s confidence.

    Explore 3 other fair value estimates on Houlihan Lokey - why the stock might be worth just $170.21!

    Build Your Own Houlihan Lokey Narrative

    Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your Houlihan Lokey research is our analysis highlighting 5 key rewards that could impact your investment decision.
    • Our free Houlihan Lokey research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Houlihan Lokey's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.