ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
USA - NYSE:ARES - US03990B1017 - Common Stock
149.34 USD
+0.91 (+0.61%)
149.37 USD
+0.03 (+0.02%)
Overall ARES gets a fundamental rating of 4 out of 10. We evaluated ARES against 236 industry peers in the Capital Markets industry. ARES may be in some trouble as it scores bad on both profitability and health. ARES shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year ARES was profitable.
In the past year ARES had a positive cash flow from operations.
ARES had positive earnings in each of the past 5 years.
In the past 5 years ARES reported 4 times negative operating cash flow.
1.2 Ratios
The Return On Assets of ARES (1.36%) is worse than 63.56% of its industry peers.
The Return On Equity of ARES (8.47%) is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 3.79%, ARES is in line with its industry, outperforming 50.85% of the companies in the same industry.
ARES had an Average Return On Invested Capital over the past 3 years of 3.87%. This is below the industry average of 7.57%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 8.47% | ||
| ROIC | 3.79% |
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 7.65% is on the low side compared to the rest of the industry. ARES is outperformed by 63.14% of its industry peers.
ARES's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 19.52%, ARES is in line with its industry, outperforming 41.95% of the companies in the same industry.
In the last couple of years the Operating Margin of ARES has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.52% | ||
| PM (TTM) | 7.65% | ||
| 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.
Compared to 5 years ago, ARES has more shares outstanding
Compared to 1 year ago, ARES has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.33, we must say that ARES is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of ARES (1.33) is better than 61.44% of its industry peers.
The Debt to FCF ratio of ARES is 3.21, which is a good value as it means it would take ARES, 3.21 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ARES (3.21) is better than 80.08% of its industry peers.
A Debt/Equity ratio of 2.93 is on the high side and indicates that ARES has dependencies on debt financing.
ARES has a worse Debt to Equity ratio (2.93) than 82.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Altman-Z | 1.33 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
ARES has a Current Ratio of 0.31. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
ARES has a worse Current ratio (0.31) than 81.78% of its industry peers.
ARES has a Quick Ratio of 0.31. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ARES (0.31) is worse than 81.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.27% over the past year.
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 49.87% 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)12.27%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%4.04%
Revenue 1Y (TTM)49.87%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%71.19%
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 23.49% on average per year.
Based on estimates for the next years, ARES will show a quite strong growth in Revenue. The Revenue will grow by 15.17% on average per year.
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue Next Year28.24%
Revenue Next 2Y23.21%
Revenue Next 3Y22.41%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 34.73 indicates a quite expensive valuation of ARES.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than 76.27% of the companies in the same industry.
ARES's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.91.
With a Price/Forward Earnings ratio of 22.95, ARES is valued on the expensive side.
62.29% of the companies in the same industry are cheaper than ARES, based on the Price/Forward Earnings ratio.
ARES is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.73 | ||
| Fwd PE | 22.95 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 61.86% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ARES is valued a bit cheaper than the industry average as 67.80% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.27 | ||
| EV/EBITDA | 54.26 |
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 25.72% in the coming years.
PEG (NY)1.22
PEG (5Y)1.85
EPS Next 2Y28.03%
EPS Next 3Y25.72%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.02%, ARES has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 8.53, 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 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.02% |
5.2 History
The dividend of ARES has a limited annual growth rate of 5.80%.
ARES has been paying a dividend for at least 10 years, so it has 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 419.97% of its income as dividend. This is not a sustainable payout ratio.
The dividend of ARES is growing, but earnings are growing more, so the dividend growth is sustainable.
DP419.97%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
149.34
+0.91 (+0.61%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners88.15%
Inst Owner Change0.07%
Ins Owners2.97%
Ins Owner Change-0.84%
Market Cap48.79B
Revenue(TTM)4.83B
Net Income(TTM)369.52M
Analysts77.39
Price Target199.45 (33.55%)
Short Float %3.86%
Short Ratio4.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.02% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP419.97%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.99%
Min EPS beat(2)-6.98%
Max EPS beat(2)12.95%
EPS beat(4)1
Avg EPS beat(4)-0.6%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)2
Avg EPS beat(8)-2.01%
EPS beat(12)4
Avg EPS beat(12)-1.34%
EPS beat(16)6
Avg EPS beat(16)-0.16%
Revenue beat(2)1
Avg Revenue beat(2)15.88%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)36.08%
Revenue beat(4)3
Avg Revenue beat(4)19.07%
Min Revenue beat(4)-4.32%
Max Revenue beat(4)38.08%
Revenue beat(8)4
Avg Revenue beat(8)9.71%
Revenue beat(12)7
Avg Revenue beat(12)13.25%
Revenue beat(16)10
Avg Revenue beat(16)21.39%
PT rev (1m)0%
PT rev (3m)5.35%
EPS NQ rev (1m)0.25%
EPS NQ rev (3m)-0.81%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.19%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.73 | ||
| Fwd PE | 22.95 | ||
| P/S | 10.11 | ||
| P/FCF | 12.27 | ||
| P/OCF | 12.02 | ||
| P/B | 11.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 54.26 |
EPS(TTM)4.3
EY2.88%
EPS(NY)6.51
Fwd EY4.36%
FCF(TTM)12.18
FCFY8.15%
OCF(TTM)12.42
OCFY8.32%
SpS14.78
BVpS13.35
TBVpS-3.96
PEG (NY)1.22
PEG (5Y)1.85
Graham Number35.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 8.47% | ||
| ROCE | 4.36% | ||
| ROIC | 3.79% | ||
| ROICexc | 4.08% | ||
| ROICexgc | 6.09% | ||
| OM | 19.52% | ||
| PM (TTM) | 7.65% | ||
| GM | N/A | ||
| FCFM | 82.39% |
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-Score5
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 3.21 | ||
| Debt/EBITDA | 11.61 | ||
| Cap/Depr | 51.14% | ||
| Cap/Sales | 1.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 368.62% | ||
| Profit Quality | 1076.46% | ||
| Current Ratio | 0.31 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 1.33 |
F-Score5
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)12.27%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%4.04%
EPS Next Y28.56%
EPS Next 2Y28.03%
EPS Next 3Y25.72%
EPS Next 5Y23.49%
Revenue 1Y (TTM)49.87%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%71.19%
Revenue Next Year28.24%
Revenue Next 2Y23.21%
Revenue Next 3Y22.41%
Revenue Next 5Y15.17%
EBIT growth 1Y8.39%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year44.29%
EBIT Next 3Y31.79%
EBIT Next 5YN/A
FCF growth 1Y2130.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y2678.78%
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.
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 3 / 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 34.73 and the Price/Book (PB) ratio is 11.19.
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 28.56% in the next year.