Ares Capital (ARCC) ended the recent trading session at $20.71, marking a slight increase of 0.1% from the previous day’s closing price. This modest gain lagged behind the S&P 500’s 0.25% rise for the day, while the Dow gained 0.2% and the tech-heavy Nasdaq climbed 0.56%.
Looking at the bigger picture, Ares Capital shares have experienced a slight dip of 1.34% over the past month. This performance trails the Finance sector’s gain of 1.86% and the S&P 500’s increase of 1.65% during the same period.
Investors will be closely watching Ares Capital’s upcoming earnings release. The consensus estimate predicts earnings per share (EPS) of $0.59, indicating stability compared to the same quarter of the previous year. Revenue is projected to reach $765.64 million, representing a substantial 16.89% jump from the equivalent quarter last year.
For the full year, Zacks Consensus Estimates forecast earnings of $2.39 per share and revenue of $3 billion, signifying a moderate increase of +0.84% and a significant jump of +14.75% respectively from the previous year.
In addition to the earnings report, investors should pay attention to any recent changes in analyst estimates for Ares Capital. These revisions often reflect the latest business trends and can be a valuable indicator of analysts’ confidence in the company’s performance and profit potential. Positive estimate revisions generally point towards a favorable outlook.
Our research suggests that these estimate changes are directly linked to short-term stock movements. To capitalize on this phenomenon, we developed the Zacks Rank system, a proven, outside-audited track record of outperformance. This system takes estimate changes into account and provides a clear, actionable rating model ranging from #1 (Strong Buy) to #5 (Strong Sell). Since 1988, #1 stocks have returned an average of +25% annually.
Over the past month, the Zacks Consensus EPS estimate for Ares Capital has moved 0.44% higher. Currently, the company holds a Zacks Rank #3 (Hold).
Examining Ares Capital’s valuation, we see a Forward P/E ratio of 8.64. This figure is slightly higher than the average Forward P/E of 8.05 for its industry, suggesting that Ares Capital is trading at a premium compared to its peers. The Financial – SBIC & Commercial Industry, which is part of the Finance sector, currently has a Zacks Industry Rank of 202, placing it in the bottom 21% of all 250+ industries. The Zacks Industry Rank measures the strength of industry groups by evaluating the average Zacks Rank of individual stocks within those groups. Our research shows that the top 50% ranked industries consistently outperform the bottom half by a factor of 2 to 1.
