HLI is now overvalued and could go down -34%

Based on our analysis, Houlihan Lokey has received an overvalued rating of 1 out of 5 stars due to several financial ratios that indicate potential concerns when compared to its industry peers. Firstly, the company has a Price-to-Earnings (PE) Ratio of 35.74, significantly higher than the sector average of 12.74. A high PE Ratio suggests that investors are paying more for each dollar of earnings, potentially indicating overvaluation. Alongside this, the Price-to-Book (PB) Ratio stands at 4.82 compared to the sector average of 1.07. A higher PB Ratio indicates that the stock price significantly exceeds the book value, which may not be justified by the company's financial performance. Moreover, Houlihan Lokey's Net Profit Margin is 14.64%, which is below the sector average of 18.12%. This lower margin suggests that the company is less efficient at converting revenue into actual profit compared to its competitors. Additionally, the Dividend Yield of 1.34% is lower than the sector average of 2.97%, indicating that shareholders receive less return in the form of dividends compared to other companies in the sector. While Houlihan Lokey does demonstrate a strong Return on Equity (ROE) of 15.26% and a Return on Assets (ROA) of 8.84%, these positive metrics are overshadowed by the concerning ratios mentioned. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.