What Happened?
Shares of investment banking firm Houlihan Lokey (NYSE: HLI) fell 8.1% in the afternoon session after the company reported disappointing second-quarter 2026 results, missing analyst expectations for both revenue and earnings. The investment bank posted revenue of $511 million, a 15.6% decline year-on-year that fell short of Wall Street's estimate of $610.3 million. Additionally, its adjusted earnings per share of $1.35 missed the consensus forecast of $1.64. The company's pre-tax profit margin for the quarter came in at 16.8%. Overall, the results pointed to a softer quarter for the firm, prompting a negative reaction from investors.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Houlihan Lokey? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Houlihan Lokey’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 29 days ago when the stock gained 3.2% on the news that the company announced its agreement to acquire Intrepid Financial Partners, an independent investment bank focused on the energy sector. The deal significantly expands Houlihan Lokey's presence in the active energy advisory market. Intrepid will add 34 financial professionals, increasing HLI's global energy team to more than 70 specialists. This combined platform is expected to enhance the firm's ability to advise oil and gas companies on mergers, acquisitions, and capital markets transactions, boosting its competitive position. As part of the transaction, Intrepid's founder, Hugh “Skip” McGee III, will become managing director and global chairman of Houlihan Lokey's Oil & Gas Group. The acquisition is expected to close before September 30, 2026.
Houlihan Lokey is down 27.1% since the beginning of the year, and at $128.38 per share, it is trading 38.6% below its 52-week high of $209.19 from September 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Houlihan Lokey’s shares 5 years ago would now be looking at an investment worth $1,444.
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