Houlihan Lokey (NYSE:HLI) Share Price Breaks Below 50-Day Moving Average - Here's Why

Key Points

• Houlihan Lokey shares fell below their 50-day moving average, trading as low as $126.02 versus the $131.50 average, amid a broader decline from the 200-day average of $140.13.
• Analysts have cut price targets following weak quarterly results: earnings per share came in at $1.35 versus $1.64 expected, while revenue fell 15.6% year over year to $511 million. The stock carries a consensus “Hold” rating and an average target of $166.38.
• The company continues to pay a quarterly dividend of $0.70 per share, equivalent to an annualized $2.80 dividend and a 2.2% yield; institutional investors own approximately 78.1% of the stock.

Houlihan Lokey, Inc. (NYSE:HLI - Get Free Report) passed below its 50-day moving average during trading on Wednesday. The stock has a 50-day moving average of $131.50 and traded as low as $126.02. Houlihan Lokey shares last traded at $126.5670, with a volume of 801,603 shares trading hands.

Analysts Set New Price Targets

A number of equities analysts have recently issued reports on HLI shares. BMO Capital Markets dropped their price target on Houlihan Lokey from $160.00 to $145.00 and set an "outperform" rating on the stock in a research note on Monday, August 3rd. Zacks Research downgraded Houlihan Lokey from a "hold" rating to a "strong sell" rating in a report on Friday, August 21st. Morgan Stanley lowered their target price on Houlihan Lokey from $187.00 to $177.00 and set an "overweight" rating on the stock in a report on Thursday, July 30th. The Goldman Sachs Group dropped their target price on Houlihan Lokey from $171.00 to $148.00 and set a "buy" rating on the stock in a research report on Thursday, July 30th. Finally, Weiss Ratings restated a "hold (c)" rating on shares of Houlihan Lokey in a research note on Friday, July 17th. Five research analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, Houlihan Lokey presently has a consensus rating of "Hold" and an average target price of $166.38.

Houlihan Lokey Trading Down 0.7%

The firm has a market capitalization of $8.74 billion, a P/E ratio of 21.27, a P/E/G ratio of 1.46 and a beta of 0.96. The company has a 50 day simple moving average of $131.50 and a two-hundred day simple moving average of $140.13.

Houlihan Lokey (NYSE:HLI - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The financial services provider reported $1.35 earnings per share for the quarter, missing the consensus estimate of $1.64 by ($0.29). The business had revenue of $511.00 million during the quarter, compared to the consensus estimate of $602.38 million. Houlihan Lokey had a return on equity of 20.20% and a net margin of 16.10%.The company's revenue for the quarter was down 15.6% on a year-over-year basis. During the same quarter in the prior year, the firm posted $2.14 EPS. On average, sell-side analysts expect that Houlihan Lokey, Inc. will post 6.93 EPS for the current fiscal year.

Houlihan Lokey Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, September 15th. Shareholders of record on Tuesday, September 1st were paid a dividend of $0.70 per share. This represents a $2.80 annualized dividend and a yield of 2.2%. The ex-dividend date of this dividend was Tuesday, September 1st. Houlihan Lokey's payout ratio is presently 47.06%.

Insider Buying and Selling at Houlihan Lokey

In related news, General Counsel Christopher M. Crain sold 1,000 shares of the company's stock in a transaction dated Thursday, September 10th. The shares were sold at an average price of $140.15, for a total transaction of $140,150.00. Following the transaction, the general counsel directly owned 1,000 shares in the company, valued at approximately $140,150. This represents a 50.00% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Corporate insiders own 22.53% of the company's stock.

Institutional Trading of Houlihan Lokey

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Royal Bank of Canada grew its stake in Houlihan Lokey by 2.8% in the first quarter. Royal Bank of Canada now owns 1,751,495 shares of the financial services provider's stock worth $251,551,000 after purchasing an additional 48,126 shares in the last quarter. Geode Capital Management LLC grew its holdings in Houlihan Lokey by 6.4% during the 4th quarter. Geode Capital Management LLC now owns 1,418,549 shares of the financial services provider's stock worth $247,133,000 after acquiring an additional 84,757 shares in the last quarter. Capital Research Global Investors grew its holdings in Houlihan Lokey by 0.6% during the 4th quarter. Capital Research Global Investors now owns 962,263 shares of the financial services provider's stock worth $167,617,000 after acquiring an additional 5,822 shares in the last quarter. Norges Bank purchased a new position in Houlihan Lokey during the 4th quarter valued at about $115,478,000. Finally, Goldman Sachs Group Inc. raised its holdings in shares of Houlihan Lokey by 20.4% in the 4th quarter. Goldman Sachs Group Inc. now owns 544,862 shares of the financial services provider's stock valued at $94,909,000 after purchasing an additional 92,453 shares in the last quarter. Hedge funds and other institutional investors own 78.07% of the company's stock.

About Houlihan Lokey

Houlihan Lokey, Inc is a global investment bank that provides financial advisory services to corporations, institutions, governments and other organizations. The firm focuses on complex strategic, financial and restructuring matters and is known for its independent advisory model.

Its principal businesses include corporate finance, financial restructuring, and financial and valuation advisory. Services include mergers and acquisitions advice, capital-raising and other strategic transactions, restructuring and liability management, fairness opinions, solvency analysis, financial reporting valuations, and transaction opinions.

Founded in 1972, Houlihan Lokey serves clients through offices across North America, Europe, the Asia-Pacific region and the Middle East.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.