ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARES - US03990B1017 - Common Stock
154.55 USD
+1.68 (+1.1%)
154.55 USD
0 (0%)
ARES gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 237 industry peers in the Capital Markets industry. While ARES is still in line with the averages on profitability rating, there are concerns on its financial health. ARES is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
In the past year ARES was profitable.
ARES had a positive operating cash flow in the past year.
In the past 5 years ARES has always been profitable.
In the past 5 years ARES reported 4 times negative operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.89%, ARES perfoms like the industry average, outperforming 43.46% of the companies in the same industry.
Looking at the Return On Equity, with a value of 11.44%, ARES is in the better half of the industry, outperforming 67.51% of the companies in the same industry.
ARES has a better Return On Invested Capital (4.41%) than 63.29% of its industry peers.
ARES had an Average Return On Invested Capital over the past 3 years of 3.87%. This is below the industry average of 6.96%.
The last Return On Invested Capital (4.41%) for ARES is above the 3 year average (3.87%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.89% | ||
| ROE | 11.44% | ||
| ROIC | 4.41% |
ROA(3y)1.39%
ROA(5y)1.33%
ROE(3y)15.05%
ROE(5y)15.08%
ROIC(3y)3.87%
ROIC(5y)3.61%
1.3 Margins
ARES has a worse Profit Margin (9.56%) than 62.45% of its industry peers.
ARES's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 19.56%, ARES perfoms like the industry average, outperforming 45.15% of the companies in the same industry.
ARES's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.56% | ||
| PM (TTM) | 9.56% | ||
| GM | N/A |
OM growth 3Y7.41%
OM growth 5Y8.32%
PM growth 3Y6.46%
PM growth 5Y9.3%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The number of shares outstanding for ARES has been increased compared to 1 year ago.
The number of shares outstanding for ARES has been increased compared to 5 years ago.
ARES has a better debt/assets ratio than last year.
2.2 Solvency
ARES has an Altman-Z score of 1.40. This is a bad value and indicates that ARES is not financially healthy and even has some risk of bankruptcy.
ARES has a better Altman-Z score (1.40) than 63.71% of its industry peers.
The Debt to FCF ratio of ARES is 2.68, which is a good value as it means it would take ARES, 2.68 years of fcf income to pay off all of its debts.
ARES has a Debt to FCF ratio of 2.68. This is amongst the best in the industry. ARES outperforms 80.17% of its industry peers.
A Debt/Equity ratio of 2.69 is on the high side and indicates that ARES has dependencies on debt financing.
With a Debt to Equity ratio value of 2.69, ARES is not doing good in the industry: 82.28% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Altman-Z | 1.4 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.26 indicates that ARES may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.26, ARES is doing worse than 84.39% of the companies in the same industry.
ARES has a Quick Ratio of 0.26. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.26, ARES is not doing good in the industry: 83.97% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 |
3. Growth
3.1 Past
ARES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.94%, which is quite good.
ARES shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.77% yearly.
The Revenue has grown by 45.54% in the past year. This is a very strong growth!
ARES shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.09% yearly.
EPS 1Y (TTM)14.94%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%25.26%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
3.2 Future
ARES is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.49% yearly.
The Revenue is expected to grow by 15.17% on average over the next years. This is quite good.
EPS Next Y28.76%
EPS Next 2Y28.05%
EPS Next 3Y25.42%
EPS Next 5Y23.49%
Revenue Next Year26.95%
Revenue Next 2Y23%
Revenue Next 3Y22.11%
Revenue Next 5Y15.17%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ARES is valuated quite expensively with a Price/Earnings ratio of 34.04.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than 75.53% of the companies in the same industry.
ARES is valuated rather expensively when we compare the Price/Earnings ratio to 26.15, which is the current average of the S&P500 Index.
ARES is valuated rather expensively with a Price/Forward Earnings ratio of 23.74.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ARES indicates a slightly more expensive valuation: ARES is more expensive than 63.71% of the companies listed in the same industry.
ARES's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.04 | ||
| Fwd PE | 23.74 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARES is valued a bit cheaper than the industry average as 61.60% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ARES is valued a bit cheaper than the industry average as 69.62% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.24 | ||
| EV/EBITDA | 50.61 |
4.3 Compensation for Growth
ARES's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ARES's earnings are expected to grow with 25.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.18
PEG (5Y)1.81
EPS Next 2Y28.05%
EPS Next 3Y25.42%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 3.10%.
ARES's Dividend Yield is comparable with the industry average which is at 8.60.
ARES's Dividend Yield is a higher than the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.1% |
5.2 History
The dividend of ARES has a limited annual growth rate of 5.80%.
ARES has paid a dividend for at least 10 years, which is a reliable track record.
As ARES did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)5.8%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
ARES pays out 320.11% of its income as dividend. This is not a sustainable payout ratio.
ARES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP320.11%
EPS Next 2Y28.05%
EPS Next 3Y25.42%
154.55
+1.68 (+1.1%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners88.15%
Inst Owner Change3.42%
Ins Owners2.97%
Ins Owner Change-0.84%
Market Cap50.49B
Revenue(TTM)5.36B
Net Income(TTM)511.84M
Analysts78.33
Price Target189.85 (22.84%)
Short Float %3.28%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.1% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP320.11%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.03%
Min EPS beat(2)-6.98%
Max EPS beat(2)0.92%
EPS beat(4)2
Avg EPS beat(4)-0.05%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)3
Avg EPS beat(8)-1.14%
EPS beat(12)5
Avg EPS beat(12)-1.24%
EPS beat(16)7
Avg EPS beat(16)0.06%
Revenue beat(2)2
Avg Revenue beat(2)3.27%
Min Revenue beat(2)0.08%
Max Revenue beat(2)6.46%
Revenue beat(4)3
Avg Revenue beat(4)2.16%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)6.46%
Revenue beat(8)5
Avg Revenue beat(8)6.42%
Revenue beat(12)7
Avg Revenue beat(12)8.82%
Revenue beat(16)10
Avg Revenue beat(16)14.79%
PT rev (1m)-4.81%
PT rev (3m)-3.81%
EPS NQ rev (1m)-0.19%
EPS NQ rev (3m)-0.38%
EPS NY rev (1m)0.18%
EPS NY rev (3m)0.16%
Revenue NQ rev (1m)-2.9%
Revenue NQ rev (3m)-2.32%
Revenue NY rev (1m)-1.75%
Revenue NY rev (3m)-0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.04 | ||
| Fwd PE | 23.74 | ||
| P/S | 9.43 | ||
| P/FCF | 11.24 | ||
| P/OCF | 11.08 | ||
| P/B | 11.29 | ||
| P/tB | N/A | ||
| EV/EBITDA | 50.61 |
EPS(TTM)4.54
EY2.94%
EPS(NY)6.51
Fwd EY4.21%
FCF(TTM)13.75
FCFY8.9%
OCF(TTM)13.95
OCFY9.03%
SpS16.39
BVpS13.69
TBVpS-3.46
PEG (NY)1.18
PEG (5Y)1.81
Graham Number37.4
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.89% | ||
| ROE | 11.44% | ||
| ROCE | 5.06% | ||
| ROIC | 4.41% | ||
| ROICexc | 4.75% | ||
| ROICexgc | 7.2% | ||
| OM | 19.56% | ||
| PM (TTM) | 9.56% | ||
| GM | N/A | ||
| FCFM | 83.89% |
ROA(3y)1.39%
ROA(5y)1.33%
ROE(3y)15.05%
ROE(5y)15.08%
ROIC(3y)3.87%
ROIC(5y)3.61%
ROICexc(3y)4.28%
ROICexc(5y)3.97%
ROICexgc(3y)4.93%
ROICexgc(5y)4.55%
ROCE(3y)4.44%
ROCE(5y)4.15%
ROICexgc growth 3Y1.38%
ROICexgc growth 5Y15.46%
ROICexc growth 3Y1.72%
ROICexc growth 5Y12.7%
OM growth 3Y7.41%
OM growth 5Y8.32%
PM growth 3Y6.46%
PM growth 5Y9.3%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Debt/EBITDA | 9.99 | ||
| Cap/Depr | 41.43% | ||
| Cap/Sales | 1.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 377.94% | ||
| Profit Quality | 877.73% | ||
| Current Ratio | 0.26 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | 1.4 |
F-Score6
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)32.4%
Cap/Depr(5y)31.97%
Cap/Sales(3y)1.79%
Cap/Sales(5y)1.39%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)14.94%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%25.26%
EPS Next Y28.76%
EPS Next 2Y28.05%
EPS Next 3Y25.42%
EPS Next 5Y23.49%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
Revenue Next Year26.95%
Revenue Next 2Y23%
Revenue Next 3Y22.11%
Revenue Next 5Y15.17%
EBIT growth 1Y6.65%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year44.29%
EBIT Next 3Y31.79%
EBIT Next 5YN/A
FCF growth 1Y5204.16%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y3244.68%
OCF growth 3YN/A
OCF growth 5YN/A
ARES MANAGEMENT CORP - A / ARES FAQ
What is the fundamental rating for ARES stock?
ChartMill assigns a fundamental rating of 5 / 10 to ARES.
What is the valuation status of ARES MANAGEMENT CORP - A (ARES) stock?
ChartMill assigns a valuation rating of 3 / 10 to ARES MANAGEMENT CORP - A (ARES). This can be considered as Overvalued.
How profitable is ARES MANAGEMENT CORP - A (ARES) stock?
ARES MANAGEMENT CORP - A (ARES) has a profitability rating of 4 / 10.
What are the PE and PB ratios of ARES MANAGEMENT CORP - A (ARES) stock?
The Price/Earnings (PE) ratio for ARES MANAGEMENT CORP - A (ARES) is 34.04 and the Price/Book (PB) ratio is 11.29.
What is the earnings growth outlook for ARES MANAGEMENT CORP - A?
The Earnings per Share (EPS) of ARES MANAGEMENT CORP - A (ARES) is expected to grow by 28.76% in the next year.