Houlihan Lokey Inc. Class A Common Stock (HLI)

FairStock Score: 65/100 — STEADY

Key Financials

Strengths

• High return on equity of 20.5% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.22, providing financial flexibility
• Altman Z-Score of 5.1 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($69) with negative 129% margin of safety—limited downside protection

AI Analysis

Houlihan Lokey Inc. Class A Common Stock is a mid-cap financial services company valued at $11.1 billion. The business generates $2.6 billion in annual revenue with a 4.4% net margin. From a quality standpoint, Houlihan shows solid Piotroski F-Score of 6/9 and Altman Z-Score of 5.1 confirms fortress-level solvency. On valuation, the stock is reasonably priced at 24.3x earnings, with trades far above its Graham Number ($69) with no margin of safety. Growth dynamics show revenue growing at 13.0% and profit growth of 22.3%. The 1.5% dividend yield adds an income component for patient holders. Our composite FairStock Score of 65/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer