Ares Capital (ARCC) Dips More Than Broader Markets: What You Should Know

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Ares Capital (ARCC) Dips More Than Broader Markets: What You Should Know


Ares Capital (ARCC) closed at $19.73 in the latest trading session, marking a -1% move from the prior day. This move lagged the S&P 500’s daily loss of 0.87%. Elsewhere, the Dow lost 0.08%, while the tech-heavy Nasdaq lost 0.34%.

Coming into today, shares of the private equity firm had lost 3.72% in the past month. In that same time, the Finance sector lost 2.89%, while the S&P 500 gained 0.7%.

Wall Street will be looking for positivity from Ares Capital as it approaches its next earnings report date. In that report, analysts expect Ares Capital to post earnings of $0.47 per share. This would mark a year-over-year decline of 12.96%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $461.4 million, up 4.86% from the year-ago period.

ARCC’s full-year Zacks Consensus Estimates are calling for earnings of $1.89 per share and revenue of $1.75 billion. These results would represent year-over-year changes of +8.62% and +15.98%, respectively.

Any recent changes to analyst estimates for Ares Capital should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.2% lower within the past month. Ares Capital is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Ares Capital is holding a Forward P/E ratio of 10.53. Its industry sports an average Forward P/E of 11.25, so we one might conclude that Ares Capital is trading at a discount comparatively.

The Financial – SBIC & Commercial Industry industry is part of the Finance sector. This group has a Zacks Industry Rank of 111, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ARCC in the coming trading sessions, be sure to utilize Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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