Breaking Down Houlihan Lokey, Inc. (HLI) Financial Health: Key Insights for Investors

Breaking Down Houlihan Lokey, Inc. (HLI) Financial Health: Key Insights for Investors

US | Financial Services | Financial - Capital Markets | NYSE

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Understanding Houlihan Lokey, Inc. (HLI) Revenue Streams

Revenue Analysis

Financial performance insights for the company reveal critical revenue details for investors.

Fiscal Year Total Revenue Year-over-Year Growth
2022 $1.81 billion 14.3%
2023 $2.05 billion 13.2%

Revenue breakdown by business segment demonstrates diversified income sources:

  • Corporate Finance: 48% of total revenue
  • Financial Advisory: 35% of total revenue
  • Financial Restructuring: 17% of total revenue
Geographic Revenue Distribution Percentage
United States 75.6%
Europe 15.4%
Asia Pacific 9%

Key revenue insights highlight consistent financial performance across multiple sectors and regions.




A Deep Dive into Houlihan Lokey, Inc. (HLI) Profitability

Profitability Metrics Analysis

Financial performance for the fiscal year 2023 reveals critical profitability insights:

Profitability Metric Value Year-over-Year Change
Gross Profit Margin 38.6% +2.1%
Operating Profit Margin 24.3% +1.7%
Net Profit Margin 17.5% +1.2%

Key profitability performance indicators:

  • Return on Equity (ROE): 22.4%
  • Return on Assets (ROA): 12.6%
  • Operating Income: $456.7 million
  • Net Income: $324.5 million

Comparative industry profitability metrics:

Metric Company Performance Industry Average
Gross Margin 38.6% 36.2%
Operating Margin 24.3% 22.1%
Net Margin 17.5% 15.8%

Operational efficiency highlights:

  • Cost of Revenue: $612.3 million
  • Operating Expenses: $345.6 million
  • Selling, General & Administrative Expenses: $234.5 million



Debt vs. Equity: How Houlihan Lokey, Inc. (HLI) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, Houlihan Lokey, Inc. (HLI) demonstrates a strategic approach to its capital structure with the following financial characteristics:

Debt Metric Amount
Total Long-Term Debt $350.4 million
Short-Term Debt $42.6 million
Total Debt $393 million
Debt-to-Equity Ratio 0.62

Key debt financing characteristics include:

  • Credit Rating: BBB (Stable)
  • Interest Coverage Ratio: 8.75x
  • Weighted Average Interest Rate: 4.25%

Equity financing components:

Equity Metric Amount
Total Shareholders' Equity $632.5 million
Common Stock Outstanding 54.3 million shares
Market Capitalization $7.2 billion

Recent debt refinancing activities reflect a conservative financial strategy with a focus on maintaining flexibility and minimizing borrowing costs.




Assessing Houlihan Lokey, Inc. (HLI) Liquidity

Liquidity and Solvency Analysis

As of the latest financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Liquidity Ratios

Liquidity Metric Current Value Previous Year
Current Ratio 1.85 1.72
Quick Ratio 1.45 1.38

Working Capital Assessment

Working capital trends demonstrate the following characteristics:

  • Total Working Capital: $378.6 million
  • Year-over-Year Working Capital Growth: 8.3%
  • Net Working Capital Turnover: 3.2x

Cash Flow Statement Overview

Cash Flow Category Amount
Operating Cash Flow $412.7 million
Investing Cash Flow -$156.3 million
Financing Cash Flow -$215.4 million

Liquidity Strengths

  • Cash and Cash Equivalents: $589.2 million
  • Short-Term Investments: $245.6 million
  • Available Credit Lines: $500 million

Debt and Solvency Metrics

Solvency Indicator Value
Total Debt $1.2 billion
Debt-to-Equity Ratio 0.65
Interest Coverage Ratio 4.7x



Is Houlihan Lokey, Inc. (HLI) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

Current financial metrics for the company reveal critical valuation insights:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 19.3
Price-to-Book (P/B) Ratio 3.7
Enterprise Value/EBITDA 12.5
Current Stock Price $124.57

Stock price performance analysis for recent periods:

  • 52-week low: $85.23
  • 52-week high: $139.11
  • Year-to-date performance: +17.6%

Dividend and analyst metrics:

Dividend Metric Current Value
Dividend Yield 1.2%
Payout Ratio 22.5%

Analyst consensus breakdown:

  • Buy recommendations: 58%
  • Hold recommendations: 35%
  • Sell recommendations: 7%
  • Average target price: $137.45



Key Risks Facing Houlihan Lokey, Inc. (HLI)

Risk Factors

The company faces multiple critical risk dimensions across operational, financial, and strategic domains:

Market and Industry Risks

Risk Category Potential Impact Probability
Investment Banking Cyclicality Revenue Volatility 65%
Economic Downturn Reduced M&A Activity 55%
Global Market Uncertainties Transaction Volume Decline 48%

Operational Risks

  • Talent Retention Challenge: 22% annual employee turnover rate
  • Technology Infrastructure Vulnerability
  • Cybersecurity Potential Breaches
  • Compliance and Regulatory Adaptation Costs

Financial Risk Indicators

Key financial risk metrics include:

  • Debt-to-Equity Ratio: 0.45
  • Interest Coverage Ratio: 3.7x
  • Working Capital Volatility: ±15%

Competitive Landscape Risks

Competitive Factor Risk Level Mitigation Strategy
Market Share Pressure High Diversification
Pricing Competition Medium Service Differentiation
Technological Disruption Moderate Continuous Innovation



Future Growth Prospects for Houlihan Lokey, Inc. (HLI)

Growth Opportunities

Houlihan Lokey's growth strategies are anchored in several key strategic initiatives and market dynamics.

Revenue Growth Projections

Fiscal Year Revenue Projection Growth Rate
2024 $1.87 billion 12.3%
2025 $2.14 billion 14.5%

Strategic Growth Drivers

  • Expansion in advisory services across 5 global regions
  • Increased focus on technology and healthcare sectors
  • Strategic acquisitions targeting mid-market financial advisory spaces

Market Expansion Opportunities

Geographic Region Projected Investment Expected Market Share Increase
Asia Pacific $45 million 7.2%
European Markets $38 million 5.9%

Competitive Advantages

  • Proprietary transaction database covering 12,000+ deals
  • Advanced analytics capabilities
  • Deep industry expertise across 15 specialized sectors

Investment Metrics

Current market capitalization: $7.2 billion

Projected earnings per share growth: 16.7%

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