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Ares Capital (ARCC) Ascends While Market Falls: Some Facts to Note

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Ares Capital (ARCC - Free Report) closed at $20.53 in the latest trading session, marking a +0.69% move from the prior day. The stock outperformed the S&P 500, which registered a daily loss of 0.72%. Elsewhere, the Dow saw a downswing of 1%, while the tech-heavy Nasdaq depreciated by 0.95%.

The private equity firm's stock has climbed by 0.34% in the past month, falling short of the Finance sector's gain of 3.08% and the S&P 500's gain of 2.16%.

The investment community will be paying close attention to the earnings performance of Ares Capital in its upcoming release. 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 $2.34 per share and a revenue of $2.84 billion, indicating changes of -1.27% and +8.59%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Ares Capital. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.62% increase. Currently, Ares Capital is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, Ares Capital is at present trading with a Forward P/E ratio of 8.73. For comparison, its industry has an average Forward P/E of 7.61, which means Ares Capital is trading at a premium to the group.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. With its current Zacks Industry Rank of 206, this industry ranks in the bottom 19% of all industries, numbering over 250.

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

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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