<div id="readability-page-1"><div><ul> <li>If you are wondering whether Houlihan Lokey's current share price really lines up with its underlying worth, you are in the right place. This article will walk through what the numbers actually say about value.</li> <li>The stock closed at US$157.30, with returns of a 7% decline over the past week, a 4.3% decline over the past month, a 10.8% decline year to date, but a 1.3% gain over 1 year, 83.3% over 3 years and 153.1% over 5 years. This performance can naturally raise questions about how much upside or risk is already priced in.</li> <li>Recent news coverage has focused on Houlihan Lokey as a specialist in advisory services, where deal activity and investor sentiment can influence how the market views the business. That backdrop helps frame the recent share price moves, as investors weigh current conditions against the company's long term role in corporate finance.</li> <li>On our framework of 6 valuation checks, Houlihan Lokey scores 2 out of 6 for being undervalued, which you can see in more detail through its valuation score. Next, we will compare different valuation approaches to this score while hinting at a deeper way to think about value that we will return to at the end of the article.</li> </ul> <p>Houlihan Lokey scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.</p> <h3>Approach 1: Houlihan Lokey Excess Returns Analysis</h3> <p>The Excess Returns model looks at how much profit a company is expected to earn above the return required by shareholders, then converts that stream of excess profit into an estimated per share value.</p> <p>For Houlihan Lokey, the starting point is its Book Value of $32.92 per share and a Stable Book Value estimate of $38.20 per share, based on weighted future book value estimates from 4 analysts. On these estimates, the business is expected to generate Stable EPS of $9.31 per share, sourced from weighted future return on equity estimates from the same 4 analysts.</p> <p>The model assumes a Cost of Equity of $3.02 per share. Subtracting that from the Stable EPS gives an Excess Return of $6.29 per share. This is consistent with an Average Return on Equity of 24.37%, which is the rate applied to the equity base to estimate those ongoing excess profits.</p> <p>When those excess returns are capitalised, the model arrives at an intrinsic value of about $178.44 per share, which implies the stock is 11.8% undervalued relative to the recent price of $157.30.</p> <p><strong>Result: UNDERVALUED</strong></p> <p>Our Excess Returns analysis suggests Houlihan Lokey is undervalued by 11.8%. Track this in your watchlist or portfolio, or discover 47 more high quality undervalued stocks.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c70f2d67-69b8-455b-920e-4c3e95539baa/chart/dcf/query-ZGF0ZT0yMDI2LTAzLTA2?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c70f2d67-69b8-455b-920e-4c3e95539baa/chart/dcf/query-ZGF0ZT0yMDI2LTAzLTA2"/><figcaption>HLI Discounted Cash Flow as at Mar 2026</figcaption></figure> <p>Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Houlihan Lokey.</p> <h3>Approach 2: Houlihan Lokey Price vs Earnings</h3> <p>For a profitable company like Houlihan Lokey, the P/E ratio is a useful shortcut because it links what you pay per share directly to the earnings that support that share price. It also conveniently reflects what the market is willing to pay today for each dollar of current earnings.</p> <p>What counts as a “normal” P/E depends on what investors expect from the business and how risky they think those earnings are. Higher expected growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually point to a lower one.</p> <p>Houlihan Lokey currently trades on a P/E of 24.5x, compared with the Capital Markets industry average of 23.0x and a peer average of 15.8x. Simply Wall St’s Fair Ratio for the company is 15.4x. This Fair Ratio is a proprietary estimate of the P/E you might expect given Houlihan Lokey’s earnings growth profile, profit margins, industry, market cap and risk factors. Because it blends these company specific drivers, it can be more informative than a simple comparison with industry or peer multiples.</p> <p>With the current P/E above the Fair Ratio, the multiple points to the shares being priced on the higher side.</p> <p><strong>Result: OVERVALUED</strong></p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c70f2d67-69b8-455b-920e-4c3e95539baa/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTAzLTA2?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c70f2d67-69b8-455b-920e-4c3e95539baa/chart/pe-multiple-vs-industry/query-ZGF0ZT0yMDI2LTAzLTA2"/><figcaption>NYSE:HLI P/E Ratio as at Mar 2026</figcaption></figure> <p>P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.</p> <h3>Upgrade Your Decision Making: Choose your Houlihan Lokey Narrative</h3> <p>Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your own story about a company, tied directly to your view of fair value and your assumptions for future revenue, earnings and margins.</p> <p>On Simply Wall St, Narratives sit on the Community page and give you an easy way to connect the story you believe about Houlihan Lokey to a clear financial forecast and then to a fair value estimate, so you can quickly compare that fair value to the current share price when deciding whether the stock looks attractive or not.</p> <p>Because Narratives on the platform update automatically when new information comes in, such as earnings reports, buyback activity or analyst revisions, your story and its numbers stay current rather than frozen at the moment you first wrote them.</p> <p>For Houlihan Lokey today, one investor might align with the more cautious view that sees fair value at US$166.00, while another might lean toward the optimistic view closer to US$232.00. Narratives help both investors turn those different perspectives into structured forecasts they can track over time against the actual share price.</p> <p>Do you think there's more to the story for Houlihan Lokey? Head over to our Community to see what others are saying!</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c70f2d67-69b8-455b-920e-4c3e95539baa/chart/quote-price/query-ZGF0ZT0yMDI2LTAzLTA2?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c70f2d67-69b8-455b-920e-4c3e95539baa/chart/quote-price/query-ZGF0ZT0yMDI2LTAzLTA2"/><figcaption>NYSE:HLI 1-Year Stock Price Chart</figcaption></figure> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p><div><h3>Valuation is complex, but we're here to simplify it.</h3><p>Discover if Houlihan Lokey might be undervalued or overvalued with our detailed analysis, featuring <strong>fair value estimates, potential risks, dividends, insider trades, and its financial condition.</strong></p><p>Access Free Analysis</p></div></div></div>

<p>Houlihan Lokey's share price has seen a decline of 7% over the past week and 10.8% year-to-date, closing at $157.30. Despite a 1.3% gain over the past year, the stock is considered undervalued by 11.8% based on Excess Returns analysis, suggesting an intrinsic value of $178.44 per share. However, its P/E ratio of 24.5x is above the industry average of 23.0x, indicating it may be overvalued. The company scores 2 out of 6 on valuation checks, raising questions about its pricing in the current market context.</p>

Is Houlihan Lokey (HLI) Priced Attractive After Recent Share Price Weakness?