Houlihan Lokey (NYSE:HLI) Sets New 1-Year Low - What's Next?

Key Points

• Houlihan Lokey shares hit a new 52-week low, trading as low as $134.06 as the stock continues to move below its recent averages. The company’s 50-day and 200-day moving averages are $149.61 and $162.15, respectively.
• Recent earnings missed expectations, with quarterly EPS of $1.63 versus the $1.79 consensus and revenue of $635.64 million versus $679.22 million expected. Revenue also fell 4.6% year over year, even though profitability metrics remained strong.
• Analysts remain cautious overall after several price target cuts, with the consensus rating at “Hold” and an average price target of $191.29. At the same time, Houlihan Lokey increased its quarterly dividend to $0.70 per share, implying a 2.1% yield.

Houlihan Lokey, Inc. (NYSE:HLI - Get Free Report) shares hit a new 52-week low during trading on Thursday . The company traded as low as $134.06 and last traded at $134.3360, with a volume of 37203 shares. The stock had previously closed at $135.96.

Analysts Set New Price Targets

A number of analysts have commented on the company. Keefe, Bruyette & Woods decreased their price objective on Houlihan Lokey from $177.00 to $172.00 and set an "outperform" rating for the company in a report on Thursday, May 7th. UBS Group set a $160.00 price objective on Houlihan Lokey in a report on Thursday, May 7th. Morgan Stanley decreased their price objective on Houlihan Lokey from $205.00 to $193.00 and set an "overweight" rating for the company in a report on Thursday, April 9th. Weiss Ratings lowered Houlihan Lokey from a "hold (c+)" rating to a "hold (c)" rating in a report on Tuesday, April 21st. Finally, Zacks Research lowered Houlihan Lokey from a "hold" rating to a "strong sell" rating in a report on Wednesday, May 13th. Five research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock presently has an average rating of "Hold" and an average price target of $191.29.

Houlihan Lokey Price Performance

The firm has a fifty day simple moving average of $149.61 and a two-hundred day simple moving average of $162.15. The firm has a market capitalization of $9.40 billion, a P/E ratio of 21.88, a price-to-earnings-growth ratio of 1.10 and a beta of 0.95.

Houlihan Lokey (NYSE:HLI - Get Free Report) last posted its quarterly earnings results on Wednesday, May 6th. The financial services provider reported $1.63 EPS for the quarter, missing analysts' consensus estimates of $1.79 by ($0.16). Houlihan Lokey had a return on equity of 22.88% and a net margin of 16.26%.The company had revenue of $635.64 million during the quarter, compared to the consensus estimate of $679.22 million. During the same period in the previous year, the business earned $1.96 earnings per share. Houlihan Lokey's revenue was down 4.6% on a year-over-year basis. On average, research analysts anticipate that Houlihan Lokey, Inc. will post 8.54 EPS for the current year.

Houlihan Lokey Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Monday, June 15th. Stockholders of record on Monday, June 1st will be issued a $0.70 dividend. The ex-dividend date of this dividend is Monday, June 1st. This is an increase from Houlihan Lokey's previous quarterly dividend of $0.60. This represents a $2.80 dividend on an annualized basis and a dividend yield of 2.1%. Houlihan Lokey's dividend payout ratio is 45.02%.

Insiders Place Their Bets

In other news, General Counsel Christopher M. Crain sold 500 shares of the firm's stock in a transaction on Wednesday, April 1st. The stock was sold at an average price of $143.40, for a total value of $71,700.00. Following the completion of the transaction, the general counsel directly owned 500 shares of the company's stock, valued at $71,700. This trade represents a 50.00% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Chairman Scott L. Beiser sold 6,265 shares of the firm's stock in a transaction on Thursday, May 21st. The stock was sold at an average price of $150.26, for a total value of $941,378.90. Following the completion of the transaction, the chairman directly owned 6,265 shares of the company's stock, valued at $941,378.90. The trade was a 50.00% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 22.83% of the stock is owned by company insiders.

Institutional Investors Weigh In On Houlihan Lokey

A number of institutional investors and hedge funds have recently made changes to their positions in HLI. Royal Bank of Canada raised its position in shares of Houlihan Lokey by 362.1% in the fourth quarter. Royal Bank of Canada now owns 1,703,369 shares of the financial services provider's stock worth $296,706,000 after buying an additional 1,334,769 shares in the last quarter. Bank of Montreal Can raised its position in shares of Houlihan Lokey by 2,723.2% in the fourth quarter. Bank of Montreal Can now owns 1,199,459 shares of the financial services provider's stock worth $208,934,000 after buying an additional 1,156,973 shares in the last quarter. Norges Bank purchased a new stake in shares of Houlihan Lokey in the fourth quarter worth $115,478,000. Vaughan Nelson Investment Management L.P. purchased a new stake in shares of Houlihan Lokey in the first quarter worth $35,728,000. Finally, Qube Research & Technologies Ltd raised its position in shares of Houlihan Lokey by 153.8% in the second quarter. Qube Research & Technologies Ltd now owns 274,387 shares of the financial services provider's stock worth $49,376,000 after buying an additional 166,285 shares in the last quarter. Hedge funds and other institutional investors own 78.07% of the company's stock.

Houlihan Lokey Company Profile

Houlihan Lokey, Inc is a global investment bank and financial services firm founded in 1972 and headquartered in Los Angeles, California. The company specializes in advisory services across a broad range of transaction types and financial matters. Since its founding, Houlihan Lokey has grown to serve corporations, financial sponsors, and government entities worldwide, providing expertise in complex and high-stakes engagements.

The firm's core service offerings include mergers and acquisitions advisory, capital markets advisory, financial restructuring and distressed M&A, and valuation and fairness opinions.

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