Back to top

Image: Bigstock

Why the Market Dipped But Ares Capital (ARCC) Gained Today

Read MoreHide Full Article

Ares Capital (ARCC - Free Report) ended the recent trading session at $20.20, demonstrating a +1% change from the preceding day's closing price. This change outpaced the S&P 500's 0.03% loss on the day. Elsewhere, the Dow saw a downswing of 0.04%, while the tech-heavy Nasdaq depreciated by 0.09%.

Heading into today, shares of the private equity firm had lost 2.49% over the past month, lagging the Finance sector's gain of 4.37% and the S&P 500's gain of 2.57%.

The upcoming earnings release of Ares Capital will be of great interest to investors. It is anticipated that the company will report an EPS of $0.5, marking a 9.09% fall compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $795.35 million, indicating a 4.79% increase compared to the same quarter of the previous year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2 per share and revenue of $3.06 billion, indicating changes of -14.16% and +2.25%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Ares Capital. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 an unchanged state. Ares Capital is holding a Zacks Rank of #3 (Hold) right now.

From a valuation perspective, Ares Capital is currently exchanging hands at a Forward P/E ratio of 10.01. Its industry sports an average Forward P/E of 8.26, so one might conclude that Ares Capital is trading at a premium comparatively.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 164, positioning it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ares Capital Corporation (ARCC) - free report >>

Published in