Houlihan Lokey, Inc. (NYSE:HLI) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates
Houlihan Lokey, Inc. (NYSE:HLI) just released its latest first-quarter report and things are not looking great. Results look to have been somewhat negative - revenue fell 5.1% short of analyst estimates at US$416m, and statutory earnings of US$0.90 per share missed forecasts by 4.6%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Houlihan Lokey
Following the latest results, Houlihan Lokey's seven analysts are now forecasting revenues of US$1.91b in 2024. This would be a credible 5.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 24% to US$4.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.93b and earnings per share (EPS) of US$4.57 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$104, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Houlihan Lokey analyst has a price target of US$115 per share, while the most pessimistic values it at US$85.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Houlihan Lokey's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.9% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.0% annually. Factoring in the forecast slowdown in growth, it looks like Houlihan Lokey is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$104, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Houlihan Lokey. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Houlihan Lokey analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Houlihan Lokey .
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This article by Simply Wall St is general in nature. 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. 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.
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