Assessing Houlihan Lokey’s Valuation After Recent Share Price Weakness

Houlihan Lokey (HLI) has drawn fresh attention after recent share price moves, with the stock showing a one-month return of about a 13% decline and a past three-month return of about a 3% decline.

See our latest analysis for Houlihan Lokey.

The recent 12.54% 30-day share price decline at Houlihan Lokey sits against a softer year-to-date share price return of a 5.81% decline, even as the 5-year total shareholder return of 180.86% points to a much stronger long-term picture. This suggests momentum has cooled for now, while the longer track record still reflects substantial value creation for shareholders.

If this move has you thinking about where else capital could work, it might be a good time to cast the net wider and check out our 22 top founder-led companies for fresh ideas.

With Houlihan Lokey now trading below some analyst targets and after a weak recent share price run, the real question is whether you are looking at a genuine value opportunity or a stock where the market already reflects future growth?

Most Popular Narrative: 21.2% Undervalued

Houlihan Lokey last closed at $166.09, while the most followed narrative sees fair value closer to $210.86, raising some clear questions about what assumptions sit underneath that gap.

Increasing global corporate complexity and cross-border transactions are driving ongoing demand for independent advisory expertise, as evidenced by resilient revenues and continued international hiring and expansion initiatives. These factors are expected to support sustained top-line revenue growth.

Read the complete narrative.

Curious how that growth story gets you to a higher fair value, tighter margins, and a richer future earnings multiple without stretching the numbers? The full narrative lays out the revenue glide path, profitability assumptions, and valuation anchor that connect today’s price to that long term target.

Result: Fair Value of $210.86 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on M&A activity staying healthy and costs being contained, as weaker U.S. deal volumes or persistent wage pressure could quickly erode that thesis.

Find out about the key risks to this Houlihan Lokey narrative.

Another Angle on the Valuation

While our model suggests Houlihan Lokey is trading about 6.2% below fair value at $166.09, its 25.9x P/E appears high compared with peers at 17.2x and a fair ratio of 16.2x. That gap points to valuation risk, so the key question is whether the growth story justifies the current pricing.

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mix of upside and risk feels finely balanced, do not wait on others to decide for you. Instead, check the 5 key rewards and 1 important warning sign and weigh the trade off yourself.

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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.

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