ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARES - US03990B1017 - Common Stock
176 USD
+3.95 (+2.3%)
176 USD
0 (0%)
ARES gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 235 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 expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
ARES had positive earnings in the past year.
In the past year ARES had a positive cash flow from operations.
In the past 5 years ARES has always been profitable.
ARES had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
ARES has a Return On Assets (1.89%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 11.44%, ARES is in the better half of the industry, outperforming 68.09% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.41%, ARES is in the better half of the industry, outperforming 62.55% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARES is below the industry average of 7.14%.
The 3 year average ROIC (3.87%) for ARES is below the current ROIC(4.41%), indicating increased profibility in the last year.
| 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's Profit Margin of 9.56% is on the low side compared to the rest of the industry. ARES is outperformed by 62.13% of its industry peers.
In the last couple of years the Profit Margin of ARES has grown nicely.
ARES has a Operating Margin of 19.56%. This is comparable to the rest of the industry: ARES outperforms 45.11% of its industry peers.
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
Based on the Altman-Z score of 1.58, we must say that ARES is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ARES (1.58) is better than 65.11% 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 better Debt to FCF ratio (2.68) than 80.00% of its industry peers.
ARES has a Debt/Equity ratio of 2.69. This is a high value indicating a heavy dependency on external financing.
ARES has a worse Debt to Equity ratio (2.69) than 80.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.69 | ||
| Debt/FCF | 2.68 | ||
| Altman-Z | 1.58 |
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 84.26% 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.
Looking at the Quick ratio, with a value of 0.26, ARES is doing worse than 84.26% of the companies in the same industry.
| 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.
Measured over the past years, ARES shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.77% on average per year.
The Revenue has grown by 45.54% in the past year. This is a very strong growth!
The Revenue has been growing by 17.09% on average over the past years. This is quite good.
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
Based on estimates for the next years, ARES will show a very strong growth in Earnings Per Share. The EPS will grow by 21.70% on average per year.
Based on estimates for the next years, ARES will show a very strong growth in Revenue. The Revenue will grow by 20.07% on average per year.
EPS Next Y29.59%
EPS Next 2Y29.36%
EPS Next 3Y26.11%
EPS Next 5Y21.7%
Revenue Next Year28.93%
Revenue Next 2Y24.74%
Revenue Next 3Y23.05%
Revenue Next 5Y20.07%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
The Price/Earnings ratio is 38.77, which means the current valuation is very expensive for ARES.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than the industry average as 74.47% of the companies are valued more cheaply.
ARES's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.17.
The Price/Forward Earnings ratio is 26.49, which means the current valuation is very expensive for ARES.
Based on the Price/Forward Earnings ratio, ARES is valued a bit more expensive than 63.40% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.79. ARES is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.77 | ||
| Fwd PE | 26.49 |
4.2 Price Multiples
61.70% of the companies in the same industry are more expensive than ARES, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 72.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.81 | ||
| EV/EBITDA | 56.45 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as ARES's earnings are expected to grow with 26.11% in the coming years.
PEG (NY)1.31
PEG (5Y)2.07
EPS Next 2Y29.36%
EPS Next 3Y26.11%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 2.77%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.39, ARES has a dividend in line with its industry peers.
ARES's Dividend Yield is a higher than the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.77% |
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.
ARES has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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 2Y29.36%
EPS Next 3Y26.11%
176
+3.95 (+2.3%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners84.1%
Inst Owner Change0%
Ins Owners2.95%
Ins Owner Change-0.8%
Market Cap57.53B
Revenue(TTM)5.36B
Net Income(TTM)511.84M
Analysts78.33
Price Target193.12 (9.73%)
Short Float %5.37%
Short Ratio3.22
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.77% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP320.11%
Div Incr Years5
Div Non Decr Years5
Ex-DateN/A
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)1.72%
PT rev (3m)-3.17%
EPS NQ rev (1m)0.44%
EPS NQ rev (3m)-0.64%
EPS NY rev (1m)0.16%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)1.05%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)3.58%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.77 | ||
| Fwd PE | 26.49 | ||
| P/S | 10.74 | ||
| P/FCF | 12.81 | ||
| P/OCF | 12.62 | ||
| P/B | 12.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 56.45 |
EPS(TTM)4.54
EY2.58%
EPS(NY)6.64
Fwd EY3.77%
FCF(TTM)13.74
FCFY7.81%
OCF(TTM)13.95
OCFY7.92%
SpS16.38
BVpS13.69
TBVpS-3.46
PEG (NY)1.31
PEG (5Y)2.07
Graham Number37.39
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 | 1.58 |
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 Y29.59%
EPS Next 2Y29.36%
EPS Next 3Y26.11%
EPS Next 5Y21.7%
Revenue 1Y (TTM)45.54%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%0.64%
Revenue Next Year28.93%
Revenue Next 2Y24.74%
Revenue Next 3Y23.05%
Revenue Next 5Y20.07%
EBIT growth 1Y6.65%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year37.85%
EBIT Next 3Y40.67%
EBIT Next 5Y17.23%
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 4 / 10 to ARES.
Can you provide the valuation status for ARES MANAGEMENT CORP - A?
ChartMill assigns a valuation rating of 3 / 10 to ARES MANAGEMENT CORP - A (ARES). This can be considered as Overvalued.
What is the profitability of ARES stock?
ARES MANAGEMENT CORP - A (ARES) has a profitability rating of 4 / 10.
Can you provide the PE and PB ratios for ARES stock?
The Price/Earnings (PE) ratio for ARES MANAGEMENT CORP - A (ARES) is 38.77 and the Price/Book (PB) ratio is 12.86.
Can you provide the expected EPS growth for ARES stock?
The Earnings per Share (EPS) of ARES MANAGEMENT CORP - A (ARES) is expected to grow by 29.59% in the next year.