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Ares Capital (ARCC) Gains But Lags Market: What You Should Know

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The latest trading session saw Ares Capital (ARCC - Free Report) ending at $20.71, denoting a +0.15% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 0.77%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 0.95%.

Shares of the private equity firm have depreciated by 2.82% over the course of the past month, underperforming the Finance sector's loss of 1.72% and the S&P 500's gain of 3.71%.

The investment community will be paying close attention to the earnings performance of Ares Capital in its upcoming release. On that day, Ares Capital is projected to report earnings of $0.58 per share, which would represent no growth from the year-ago period. In the meantime, our current consensus estimate forecasts the revenue to be $714.27 million, indicating a 12.66% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $2.34 per share and revenue of $2.87 billion, which would represent changes of -1.27% and +9.98%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Ares Capital. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.11% increase. As of now, Ares Capital holds a Zacks Rank of #3 (Hold).

Looking at its valuation, Ares Capital is holding a Forward P/E ratio of 8.84. This valuation marks a premium compared to its industry's average Forward P/E of 8.18.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 149, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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