In the latest trading session, Ares Capital (ARCC) closed at $20.67, marking a +1.17% move from the previous day. This change outpaced the S&P 500’s 0.62% gain on the day. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, lost 0.03%.
Heading into today, shares of the private equity firm had gained 0.19% over the past month, outpacing the Finance sector’s loss of 1.47% and lagging the S&P 500’s gain of 0.87% in that time.
Investors will be hoping for strength from Ares Capital as it approaches its next earnings release. On that day, Ares Capital is projected to report earnings of $0.47 per share, which would represent a year-over-year decline of 12.96%. Our most recent consensus estimate is calling for quarterly revenue 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.
It is also important to note the recent changes to analyst estimates for Ares Capital. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.2% lower. Ares Capital is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, Ares Capital currently has a Forward P/E ratio of 10.92. For comparison, its industry has an average Forward P/E of 11.43, which means Ares Capital is trading at a discount to the group.
The Financial – SBIC & Commercial Industry industry is part of the Finance sector. This group has a Zacks Industry Rank of 103, putting it in the top 41% 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.
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