ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis
NYSE:ARES - New York Stock Exchange, Inc. - US03990B1017 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ARES. ARES was compared to 232 industry peers in the Capital Markets industry. Both the profitability and financial health of ARES have multiple concerns. ARES is valued quite expensive, but it does show an excellent growth.
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.
ARES had negative operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a Return On Assets value of 1.31%, ARES is not doing good in the industry: 60.34% of the companies in the same industry are doing better.
The Return On Equity of ARES (7.98%) is comparable to the rest of the industry.
ARES has a Return On Invested Capital (3.71%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for ARES is below the industry average of 7.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.31% | ||
| ROE | 7.98% | ||
| ROIC | 3.71% |
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
The Profit Margin of ARES (8.33%) is worse than 64.22% of its industry peers.
In the last couple of years the Profit Margin of ARES has grown nicely.
Looking at the Operating Margin, with a value of 21.45%, ARES is in line with its industry, outperforming 43.10% of the companies in the same industry.
ARES's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.45% | ||
| PM (TTM) | 8.33% | ||
| 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
ARES has more shares outstanding than it did 1 year ago.
ARES has more shares outstanding than it did 5 years ago.
ARES has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.47, we must say that ARES is in the distress zone and has some risk of bankruptcy.
ARES has a Altman-Z score of 1.47. This is in the better half of the industry: ARES outperforms 62.50% of its industry peers.
ARES has a debt to FCF ratio of 3.18. This is a good value and a sign of high solvency as ARES would need 3.18 years to pay back of all of its debts.
ARES's Debt to FCF ratio of 3.18 is fine compared to the rest of the industry. ARES outperforms 74.57% of its industry peers.
A Debt/Equity ratio of 2.84 is on the high side and indicates that ARES has dependencies on debt financing.
With a Debt to Equity ratio value of 2.84, ARES is not doing good in the industry: 82.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.84 | ||
| Debt/FCF | 3.18 | ||
| Altman-Z | 1.47 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.34 indicates that ARES may have some problems paying its short term obligations.
ARES's Current ratio of 0.34 is on the low side compared to the rest of the industry. ARES is outperformed by 84.05% of its industry peers.
ARES has a Quick Ratio of 0.34. 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's Quick ratio of 0.34 is on the low side compared to the rest of the industry. ARES is outperformed by 84.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.90% 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.
ARES shows a strong growth in Revenue. In the last year, the Revenue has grown by 21.00%.
Measured over the past years, ARES shows a quite strong growth in Revenue. The Revenue has been growing by 17.09% on average per year.
EPS 1Y (TTM)13.9%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%36.25%
Revenue 1Y (TTM)21%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%25.11%
3.2 Future
ARES is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.57% yearly.
Based on estimates for the next years, ARES will show a very strong growth in Revenue. The Revenue will grow by 22.70% on average per year.
EPS Next Y32.08%
EPS Next 2Y29%
EPS Next 3Y25.57%
EPS Next 5YN/A
Revenue Next Year24.14%
Revenue Next 2Y23.88%
Revenue Next 3Y22.7%
Revenue Next 5YN/A
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 39.94, ARES can be considered very expensive at the moment.
Based on the Price/Earnings ratio, ARES is valued a bit more expensive than 76.29% of the companies in the same industry.
ARES is valuated rather expensively when we compare the Price/Earnings ratio to 26.65, which is the current average of the S&P500 Index.
ARES is valuated quite expensively with a Price/Forward Earnings ratio of 25.76.
65.09% of the companies in the same industry are cheaper than ARES, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.27. ARES is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.94 | ||
| Fwd PE | 25.76 |
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 61.21% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 67.24% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.93 | ||
| EV/EBITDA | 60.41 |
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 25.57% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.25
PEG (5Y)2.13
EPS Next 2Y29%
EPS Next 3Y25.57%
5. Dividend
5.1 Amount
ARES has a Yearly Dividend Yield of 2.68%.
ARES's Dividend Yield is comparable with the industry average which is at 8.07.
Compared to an average S&P500 Dividend Yield of 2.44, ARES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
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
403.92% of the earnings are spent on dividend by ARES. This is not a sustainable payout ratio.
ARES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP403.92%
EPS Next 2Y29%
EPS Next 3Y25.57%
NYSE:ARES (6/24/2025, 2:37:03 PM)
170.15
+4.8 (+2.9%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners80.27%
Inst Owner Change2.16%
Ins Owners3%
Ins Owner Change3.46%
Market Cap55.57B
Analysts78.26
Price Target183.87 (8.06%)
Short Float %2.79%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
Yearly Dividend4.22
Dividend Growth(5Y)5.8%
DP403.92%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.93%
Min EPS beat(2)-7.09%
Max EPS beat(2)12.95%
EPS beat(4)1
Avg EPS beat(4)0.83%
Min EPS beat(4)-7.09%
Max EPS beat(4)12.95%
EPS beat(8)3
Avg EPS beat(8)-0.69%
EPS beat(12)5
Avg EPS beat(12)-0.36%
EPS beat(16)7
Avg EPS beat(16)1.83%
Revenue beat(2)1
Avg Revenue beat(2)1.05%
Min Revenue beat(2)-4.32%
Max Revenue beat(2)6.42%
Revenue beat(4)2
Avg Revenue beat(4)8.9%
Min Revenue beat(4)-4.6%
Max Revenue beat(4)38.08%
Revenue beat(8)4
Avg Revenue beat(8)11.25%
Revenue beat(12)6
Avg Revenue beat(12)9.99%
Revenue beat(16)10
Avg Revenue beat(16)30.51%
PT rev (1m)5.21%
PT rev (3m)-10.25%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-8.69%
EPS NY rev (1m)0.13%
EPS NY rev (3m)-1.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-14.61%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-6.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.94 | ||
| Fwd PE | 25.76 | ||
| P/S | 13.03 | ||
| P/FCF | 13.93 | ||
| P/OCF | 13.64 | ||
| P/B | 12.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 60.41 |
EPS(TTM)4.26
EY2.5%
EPS(NY)6.61
Fwd EY3.88%
FCF(TTM)12.21
FCFY7.18%
OCF(TTM)12.48
OCFY7.33%
SpS13.06
BVpS13.64
TBVpS-4.05
PEG (NY)1.25
PEG (5Y)2.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.31% | ||
| ROE | 7.98% | ||
| ROCE | 4.26% | ||
| ROIC | 3.71% | ||
| ROICexc | 4.05% | ||
| ROICexgc | 6.15% | ||
| OM | 21.45% | ||
| PM (TTM) | 8.33% | ||
| GM | N/A | ||
| FCFM | 93.48% |
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%
ROICexcg growth 3Y1.38%
ROICexcg 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 Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.84 | ||
| Debt/FCF | 3.18 | ||
| Debt/EBITDA | 11.8 | ||
| Cap/Depr | 55.12% | ||
| Cap/Sales | 2.05% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 379.52% | ||
| Profit Quality | 1121.77% | ||
| Current Ratio | 0.34 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | 1.47 |
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)13.9%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%36.25%
EPS Next Y32.08%
EPS Next 2Y29%
EPS Next 3Y25.57%
EPS Next 5YN/A
Revenue 1Y (TTM)21%
Revenue growth 3Y-2.66%
Revenue growth 5Y17.09%
Sales Q2Q%25.11%
Revenue Next Year24.14%
Revenue Next 2Y23.88%
Revenue Next 3Y22.7%
Revenue Next 5YN/A
EBIT growth 1Y1.55%
EBIT growth 3Y4.56%
EBIT growth 5Y26.83%
EBIT Next Year54.93%
EBIT Next 3Y33.01%
EBIT Next 5YN/A
FCF growth 1Y1490.29%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y1725.64%
OCF growth 3YN/A
OCF growth 5YN/A