Is Houlihan Lokey, Inc. overvalued or undervalued?

As of 29 July 2025, the valuation grade for Houlihan Lokey, Inc. has moved from fair to expensive, indicating that the stock is overvalued. The company currently has a P/E ratio of 30, a Price to Book Value of 5.68, and an EV to EBITDA ratio of 20.21, all of which suggest a premium valuation compared to its peers. For instance, Jefferies Financial Group, Inc. has a P/E of 29.53, while Tradeweb Markets, Inc. is even higher at 47.50, but Houlihan Lokey's ratios still reflect a higher valuation in the context of its industry.
In terms of performance, Houlihan Lokey has outperformed the S&P 500 over multiple periods, with a year-to-date return of 20.03% compared to the S&P 500's 12.22%, and a one-year return of 34.67% versus 17.14%. Despite this strong performance, the current valuation metrics suggest that the stock may be overpriced relative to its fundamentals.