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Ares Capital (ARCC) Increases Despite Market Slip: Here's What You Need to Know

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In the latest market close, Ares Capital (ARCC - Free Report) reached $20.12, with a +0.65% movement compared to the previous day. The stock's change was more than the S&P 500's daily loss of 0.31%. Meanwhile, the Dow experienced a drop of 0.41%, and the technology-dominated Nasdaq saw a decrease of 0.27%.

Prior to today's trading, shares of the private equity firm had lost 0.6% over the past month. This has lagged the Finance sector's gain of 3.08% and the S&P 500's gain of 3.05% in that time.

Investors will be eagerly watching for the performance of Ares Capital in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.58, reflecting a 3.57% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $700.81 million, up 13.4% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.32 per share and a revenue of $2.84 billion, indicating changes of -2.11% and +8.59%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for Ares Capital. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

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.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.05% downward. Currently, Ares Capital is carrying a Zacks Rank of #3 (Hold).

Looking at valuation, Ares Capital is presently trading at a Forward P/E ratio of 8.61. This represents a premium compared to its industry's average Forward P/E of 7.66.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry, currently bearing a Zacks Industry Rank of 191, finds itself in the bottom 25% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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