Houlihan Lokey, Inc. Price and EPS Surprise

Houlihan Lokey, Inc. price-eps-surprise | Houlihan Lokey, Inc. Quote

Q3 Earnings Whispers for HLI

Our proven model does not conclusively predict an earnings beat for Houlihan Lokey this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.

Earnings ESP: Houlihan Lokey has an Earnings ESP of -3.97% because the Most Accurate Estimate of $1.45 is pegged lower than the Zacks Consensus Estimate of $1.51. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: HLI currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

In the fiscal third quarter, Houlihan Lokey's top line is likely to have benefited from improved fee revenues derived from offering enhanced advisory services on transactions contingent on individually negotiated engagement letters.

A strong contribution from the Financial Restructuring segment is likely to have driven Houlihan Lokey's overall revenues. The unit is expected to have gained from opportunities in large-cap and middle markets. A high-leverage environment bodes well for this segment. This, in turn, is likely to have led to an uptick in the number of closed transactions in the to-be-reported quarter.

Improving M&A sentiment is expected to have benefited the Corporate Finance segment. The integration of the Triago acquisition has strengthened private capital capabilities, contributing positively to the segment.

Continued growth from non-cyclical services like portfolio valuation is expected to have benefited the Financial and Valuation Advisory segment in the fiscal third quarter. A rebounding merger and acquisition market is expected to have boosted demand for HLI’s valuation services.

Elevated operating expenses, stemming from higher travel, meals and entertainment costs, rent expenses, professional fees, and information technology and communications costs, are likely to have affected HLI's margins.

HLI’s Price Performance

HLI’s stock has surged 51.9% in the past year, outperforming the industry’s growth of 24.6%. The stock also outperformed the S&P 500 Index, which has gained 25.5% during the same period.Companies from the same industry, like Community Financial System, Inc. CBU and Moody's Corporation MCO, have gained 33.2% and 24.4%, respectively, in the same time frame.

HLI's 1-Year Price Performance Comparison