Houlihan Lokey has been treading water for the past six months, recording a small loss of 2.4% while holding steady at $189.85. The stock also fell short of the S&P 500’s 10.6% gain during that period.

Is now the time to buy HLI? Find out in our full research report, it’s free.

Why Are We Positive On Houlihan Lokey?

Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.

1. Skyrocketing Revenue Shows Strong Momentum

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

Over the last five years, Houlihan Lokey grew its revenue at an impressive 18% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Houlihan Lokey’s remarkable 19.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

3. Growing TBVPS Reflects Strong Asset Base

In the financials industry, tangible book value per share (TBVPS) provides the clearest picture of shareholder value, as it focuses on concrete assets while excluding intangible items that may not hold value during challenging times.

Houlihan Lokey’s TBVPS increased by 13.9% annually over the last five years, and growth has recently accelerated as TBVPS grew at an incredible 42.9% annual clip over the past two years (from $5.26 to $10.75 per share).

Final Judgment

These are just a few reasons why we think Houlihan Lokey is one of the best financials companies out there. With its shares lagging the market recently, the stock trades at 22.6× forward P/E (or $189.85 per share). Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

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