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Strength Seen in Houlihan Lokey (HLI): Can Its 6.8% Jump Turn into More Strength?

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  • HLI

Houlihan Lokey (HLI) shares ended the last trading session 6.8% higher at $70.37. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.8% gain over the past four weeks.

Investors’ bullish sentiments stemmed from better-than-expected fourth-quarter fiscal 2021 (ended Mar 31) results. The company’s adjusted earnings of $1.51 per share handily surpassed the Zacks Consensus Estimate of $1.12. Also, this reflected a substantial improvement from 96 cents earned in the prior-year quarter. Results benefited from growth in revenues, partly offset by higher operating expenses.

Price and Consensus

Price Consensus Chart for HLI
Price Consensus Chart for HLI

This investment banking company is expected to post quarterly earnings of $0.94 per share in its upcoming report, which represents a year-over-year change of +67.9%. Revenues are expected to be $316.25 million, up 49.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Houlihan Lokey, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HLI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>


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