Houlihan Lokey (HLI) Hires And Board Changes Put Its Undervalued Narrative To The Test

Houlihan Lokey (HLI) has seen a flurry of leadership changes, from a planned board departure by Gillian B. Zucker to new senior hires in its Financial Sponsors Group across Europe and Latin America.

Despite these leadership moves, Houlihan Lokey’s share price has stayed under pressure in 2026. The stock is down 22.53% on a year to date share price basis, and total shareholder return has declined 32.26% over one year. This comes even after a 10.69% one month share price gain that hints at some rebuilding momentum from a longer track record that includes a 64.06% total shareholder return over five years.

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For Houlihan Lokey, the sharp share price drop, set against growing revenue and net income, highlights a simple tension. Is the recent rebound the market rethinking the business, or is it just sentiment whipsawing before valuation catches up?

Most Popular Narrative: 11.6% Undervalued

Set against Houlihan Lokey’s last close of $136.61, the most followed narrative points to a fair value of $154.50, leaving a double digit implied discount that investors are now weighing against recent deal activity and capital returns.

Ongoing global expansion, sector diversification, and talent recruitment position Houlihan Lokey for sustained revenue growth and increased market share. Strong pipelines from succession planning, resilient restructuring activity, and enhanced client engagement are stabilizing fee income and supporting earnings despite macroeconomic shifts.

Read the complete narrative.

Curious what sits behind that valuation gap? The narrative leans heavily on rising advisory demand, richer margins, and a future earnings profile that assumes disciplined capital returns and steady deal flow.

Result: Fair Value of $154.50 (UNDERVALUED)

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

Still, Houlihan Lokey’s heavy reliance on U.S. deal activity and its high compensation base could pressure earnings if transaction volumes soften or fee pools shrink.

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

Another View On Houlihan Lokey’s Valuation

The first narrative leans on earnings forecasts and analyst targets. A different lens comes from the current P/E. Houlihan Lokey trades on 23.5x earnings, while the peer group sits closer to 14x and the fair ratio is estimated at 14.7x, which points to a richer tag and less margin for error.

If the share price drifted toward that 14.7x fair ratio, the re-rating would be meaningful, especially after a year when total return already fell 32.26%. The stock still looks cheaper than the wider US Capital Markets industry on 39.7x. The question is which side of the comparison is more relevant.

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

Next Steps

Sentiment in the Houlihan Lokey story is mixed right now. Consider reviewing the situation promptly, stress testing the numbers yourself, and making your own call. To see what optimists are focusing on, take a closer look at the 3 key rewards

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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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