HLI - Houlihan Lokey: Limited Upside Due To High Valuation

2024-01-24 03:41:35 ET

Summary

• Since its IPO, Houlihan Lokey has delivered a total return of 543%, outperforming both the S&P 500 and financials sector.
• HLI has delivered strong financial performance despite operating in a highly competitive industry.
• HLI has a differentiated business model, which results in less cyclicality compared to peers.
• The stock is currently trading at an elevated valuation relative to its own history, which I believe limits upside from current levels.
• I am initiating the stock with a hold rating.

Houlihan Lokey ( HLI ) has delivered solid results for shareholders since becoming a public company in 2015. Since its IPO, HLI has delivered a total return of 543%. Comparably, during the same period the S&P 500 has delivered a total return of 169% while the Financial Select Sector SPDR ETF ( XLF ) has delivered a total return of 121%....

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