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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.