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Houlihan Lokey, Inc. HLI

Three-pass checkedFresh as companies report

While every other advisory bank was printing records this quarter, Houlihan Lokey's revenue fell 16%, and the stock has been cut 39% from its high for being the one name that zigged.

The setup turns on whether the miss is what management calls it, temporary deal-timing noise, or the first evidence that the firm's famous counter-cyclical balance has stopped balancing.

HLI · price with moving averages

Daily · 6MWeekly · 3Y
$86$119$152$185$218 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Houlihan Lokey is the mid-market's deal machine: the most active M&A advisor by transaction count for years running, the dominant restructuring franchise when credit turns, and a valuation-opinion business that hums in every weather. The three legs are the point, corporate finance earns in booms, restructuring earns in busts, valuation earns always, and that architecture historically made HLI the advisory firm you could hold through a cycle. Fees are the revenue, bankers are the cost, 64% of revenue in the latest quarter, and the moat is franchise density in thousands of sub-$1B deals the bulge bracket ignores.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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