3 Reasons HLI Has Explosive Upside Potential

September 19, 2025 at 00:01 AM EDT

HLI Cover Image

Since September 2020, the S&P 500 has delivered a total return of 103%. But one standout stock has more than doubled the market - over the past five years, Houlihan Lokey has surged 262% to $204.66 per share. Its momentum hasn’t stopped as it’s also gained 25.7% in the last six months thanks to its solid quarterly results, beating the S&P by 8.9%.

Is now still a good time to buy HLI? Or are investors being too optimistic? Find out in our full research report, it’s free.

Why Are We Positive On HLI?

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 sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

Thankfully, Houlihan Lokey’s 17.2% annualized revenue growth over the last five years was impressive. Its growth surpassed the average financials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Houlihan Lokey’s remarkable 18.4% 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.

Houlihan Lokey Trailing 12-Month EPS (Non-GAAP)

3. Growing TBVPS Reflects Strong Asset Base

Tangible book value per share (TBVPS) serves as a key indicator of a financial institution’s strength, representing the hard assets available to shareholders after removing intangible assets that could evaporate during economic distress.

Houlihan Lokey’s TBVPS increased by 11% annually over the last five years, and growth has recently accelerated as TBVPS grew at an incredible 43.7% annual clip over the past two years (from $4.68 to $9.65 per share).

Houlihan Lokey Quarterly Tangible Book Value per Share

Final Judgment

These are just a few reasons why Houlihan Lokey ranks near the top of our list, and with its shares topping the market in recent months, the stock trades at 27.3× forward P/E (or $204.66 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More Than Houlihan Lokey

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

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