Revisiting Houlihan Lokey's Successful Rotation And Thesis

2025-05-13 17:20:02 ET

Summary

• Houlihan Lokey is a market leader in M&A, Capital Solutions, Financial Restructuring, and Advisory services, showing strong revenue growth and low debt.
• Despite its strengths, the current valuation of Houlihan Lokey is too high, making it a "Hold" with a price target of $115/share.
• The company's premium valuation is justified by increased regulation and demand for expertise, but it still doesn't offer a 15% annualized return.
• I recommend holding off on investing until the stock price drops below $115/share, aligning with my updated price target for a better risk/reward ratio.

Dear readers/followers,

My coverage for Houlihan Lokey can be found here, with the latest article now about 8 months old, but not really performing all that much better than the market. Anything under a 5% variation I consider to be more of a "rounding error" than a clear implication of either under- or overvaluation....

Read the full article on Seeking Alpha

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