Is Houlihan Lokey’s (HLI) Index Exit and CLO Pivot Reframing Its Core Equity Story?

• In late June 2026, Houlihan Lokey, Inc. (NYSE:HLI) was removed from several Russell growth benchmarks, while Morningstar, Inc. announced a collaboration with the firm to create new Morningstar Houlihan CLO Indexes for the collateralized loan obligation market.
• This combination of index exclusions and a new role in CLO benchmarking highlights how Houlihan Lokey’s market positioning is shifting across both equity and credit arenas.
• We’ll now examine how Houlihan Lokey’s broad removal from Russell growth indexes may influence its previously outlined investment narrative.

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Houlihan Lokey Investment Narrative Recap

To own Houlihan Lokey, you need to be comfortable with a fee-driven advisory model that leans heavily on U.S. M&A and restructuring activity, supported by disciplined capital returns. The broad removal from Russell growth indexes mainly affects passive fund ownership and liquidity rather than the core business, so it does not materially change the near term focus on sustaining deal pipelines and managing costs, or the key risk around elevated expenses if revenue momentum slows.

The Morningstar Houlihan CLO Indexes announcement is the clearest business link to this news, reinforcing Houlihan Lokey’s efforts to deepen its role in credit and private markets just as its equity index profile changes. While the immediate catalyst remains active advisory mandates and ongoing buybacks, the CLO index collaboration could modestly enhance the firm’s credibility and visibility with institutional clients in a segment where benchmarks are becoming more important.

Yet while this strengthens one side of the story, investors should also be aware of how rising costs and slower global deal growth could still...

Read the full narrative on Houlihan Lokey (it's free!)

Houlihan Lokey's narrative projects $3.6 billion revenue and $583.7 million earnings by 2029. This requires 11.0% yearly revenue growth and a roughly $158 million earnings increase from $425.7 million today.

Uncover how Houlihan Lokey's forecasts yield a $172.50 fair value, a 23% upside to its current price.

Exploring Other Perspectives

Before this index news, the most optimistic analysts were assuming Houlihan Lokey could reach about US$4.0 billion in revenue and US$596.8 million in earnings by 2029, so if you are weighing that view against the risk that automation and AI could compress advisory fees over time, it is worth recognizing that these bullish forecasts may need updating and that reasonable people can look at the same stock and reach very different conclusions.

Explore 2 other fair value estimates on Houlihan Lokey - why the stock might be worth just $172.50!

Reach Your Own Conclusion

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• 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.

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