Houlihan Lokey Q1 revenue falls 15% driven by Middle East conflict

Overview

• U.S. investment bank's fiscal Q1 revenue fell and missed analyst expectations

• Adjusted net income for fiscal Q1 missed analyst expectations

• Company cites ongoing headwinds in Corporate Finance, including instability in the Middle East and tech sector disruptions

Outlook

• Company says headwinds in Corporate Finance are expected to be temporary

• Houlihan Lokey sees uncertainty over timing of recovery from current headwinds

• Company expects improved performance for the balance of the year

Result Drivers

• CORPORATE FINANCE HEADWINDS - Co said ongoing instability in the Middle East and disruptions in the technology sector, especially software, weighed on Corporate Finance results

• LOWER TRANSACTION FEES - Corporate Finance revenue fell due to a decrease in the average transaction fee on closed transactions, attributed to transaction mix

• FEWER RESTRUCTURING DEALS - Financial Restructuring revenue declined mainly due to a decrease in the number of closed transactions

Company press release: ID:nBw5pv9lwa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the investment banking brokerage services peer group is "buy."

• Wall Street's median 12-month price target for Houlihan Lokey Inc is $163.50, about 12.4% above its July 28 closing price of $145.47

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 17 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)