Houlihan Lokey, Inc. (HLI): A Bull Case Theory

We came across a bullish thesis on Houlihan Lokey, Inc. on X.com by @WeissRatings. In this article, we will summarize the bulls’ thesis on HLI. Houlihan Lokey, Inc.'s share was trading at $168.81 as of January 29th. HLI’s trailing and forward P/E were 29.16 and 20.41 respectively according to Yahoo Finance.

Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), capital market, financial restructurings and liability management, and financial and valuation advisory services worldwide. HLI stands out as a premier investment bank, with a particularly strong position in M&A advisory and corporate restructuring, including bankruptcies. This dual expertise positions HLI to benefit significantly if market volatility rises or economic stress in 2026 triggers increased corporate distress.

While Goldman Sachs recently upgraded HLI from a "HOLD" to a "BUY", noting its strength in advisory services, some observers question the impartiality of the endorsement, as HLI was scheduled to present at Goldman’s Financial Services Conference the following day. However, data support HLI’s strong standing among peers, especially in restructuring, where it consistently ranks as a top advisor. The firm’s deep experience and large-scale engagement in complex deals give it a durable competitive advantage, suggesting that it is not merely a short-term trade but a longer-term investment opportunity.

Given the potential for rising M&A activity and corporate restructurings next year, HLI is well positioned to capture outsized gains, benefiting from both transactional volume and its reputation in high-stakes advisory work. Investors should note, however, that market and deal-flow risks remain, and outcomes will depend on macroeconomic conditions and the pace of corporate distress.

Overall, HLI represents a compelling opportunity for 2026, combining a defensive moat in restructuring with upside exposure to M&A cycles, making it a potential “sleeper hit” for investors who understand the inherent risks and rewards. Its differentiated expertise and positioning in both stable and stressed environments create a strong risk/reward profile that merits attention.

Previously we covered a bullish thesis on The Goldman Sachs Group, Inc. (GS) by LongYield in April 2025, which highlighted the firm’s strong Q1 performance, robust ROE, record shareholder returns, and leadership in Global Banking & Markets. The company's stock price has appreciated approximately by 88.38% since our coverage. The thesis still stands. @WeissRatings shares a similar focus but emphasizes Houlihan Lokey’s strength in M&A advisory and corporate restructuring.

Houlihan Lokey, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held HLI at the end of the third quarter which was 33 in the previous quarter. While we acknowledge the potential of HLI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.