Houlihan Lokey is Monday's pick for IBD 50 Growth Stocks To Watch as the financial and investment company is holding up relatively well on a brutal day of selling. Houlihan Lokey stock trimmed morning losses and is climbing into positive territory.
The firm specializes in mergers, acquisitions and divestitures with clients including corporations, institutions, and governments. It works with capital providers including commercial banks, credit providers, insurance funds and asset managers. Houlihan Lokey has offices in the Americas, Europe, the Middle East and the Asia-Pacific region.
The investment company holds the No. 1 spot out of 33 stocks in the finance-investment banking group, which ranks No. 38 out of the 197 Investor's Business Daily industry groups.
Houlihan Lokey Stock Climbs Back From Losses
Shares initially pulled back around 3.6% Monday morning in heavy volume but turned positive by midday. Shares were up around 0.5% in recent trades.
The stock is back above the 5% buy zone reaching to 144.82 of a stage two flat base with a 137.92 buy point, according to MarketSurge pattern recognition. Investors, however, should be aware the market is now in a correction and stocks look weak overall.
The stock tested its 21-day exponential moving average Monday but has regained the line in recent trades.
Shares peaked following the company's higher-than-expected fiscal first-quarter adjusted earnings and sales late Tuesday. The stock reached a record high on Wednesday before retreating Thursday.
Earnings Keep Improving
Quarterly earnings for the financial company have greatly improved with its earnings growth accelerating. It reported a 37% increase in its fiscal first-quarter, rising from 7% and 14% in the prior two quarters.
This growth follows five straight quarters of declining profits. Quarterly estimates call for earnings growth ranging from 20% to 25% over the next four quarters.
Fiscal first-quarter sales growth increased to 24% from 12% and 17% in the prior two quarters. Similar to its earnings, sales growth improved from five declining quarters.
"Although macro uncertainties still exist, we are optimistic about this fiscal year given continued improvements in M&A and capital markets activity," Houlihan Lokey Chief Executive Scott Adelson said in the earnings release.
Fiscal 2025 earnings are forecast to grow 27% then 18% in fiscal 2026, according to FactSet. Houlihan Lokey stock boasts a best-possible 99 IBD Composite Rating.
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