What Happened?
Shares of investment banking firm Houlihan Lokey (NYSE: HLI) jumped 3.2% in the afternoon session after the company announced its agreement to acquire Intrepid Financial Partners, an independent investment bank focused on the energy sector.
The deal significantly expands Houlihan Lokey's presence in the active energy advisory market. Intrepid will add 34 financial professionals, increasing HLI's global energy team to more than 70 specialists. This combined platform is expected to enhance the firm's ability to advise oil and gas companies on mergers, acquisitions, and capital markets transactions, boosting its competitive position.
As part of the transaction, Intrepid's founder, Hugh “Skip” McGee III, will become managing director and global chairman of Houlihan Lokey's Oil & Gas Group. The acquisition is expected to close before September 30, 2026.
After the initial pop, the shares cooled down to $138.30, up 3.1% from the previous close.
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What Is The Market Telling Us
Houlihan Lokey’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 8.8% on the news that the company reported third-quarter 2025 results that surpassed Wall Street's forecasts for both revenue and earnings.
The company delivered strong headline numbers, with revenue growing 14.7% year on year to $659.5 million and adjusted earnings per share of $1.84 beating consensus estimates by 9.3%. Despite these positive results, the stock's decline suggests investors may be focused on the company's future prospects. The outlook for the next twelve months indicates an expected full-year EPS growth of 5.4%, a figure that may have underwhelmed investors who had priced in higher expectations for the premium-valued stock.
The market's negative reaction implies that the solid quarterly performance was not enough to outweigh concerns about a potential slowdown in future profit growth.
Houlihan Lokey is down 21.6% since the beginning of the year, and at $138.30 per share, it is trading 33.9% below its 52-week high of $209.19 from September 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Houlihan Lokey’s shares 5 years ago would now be looking at an investment worth $1,695.
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