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ARES MANAGEMENT CORP - A (ARES) Stock Fundamental Analysis

NYSE:ARES - New York Stock Exchange, Inc. - US03990B1017 - Common Stock - Currency: USD

174.09  -5.6 (-3.12%)

After market: 174.09 0 (0%)

Fundamental Rating

3

Taking everything into account, ARES scores 3 out of 10 in our fundamental rating. ARES was compared to 225 industry peers in the Capital Markets industry. There are concerns on the financial health of ARES while its profitability can be described as average. ARES is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

4

1. Profitability

1.1 Basic Checks

In the past year ARES was profitable.
In the past year ARES had a positive cash flow from operations.
ARES had positive earnings in 4 of the past 5 years.
ARES had a negative operating cash flow in each of the past 5 years.
ARES Yearly Net Income VS EBIT VS OCF VS FCFARES Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -1B -2B

1.2 Ratios

The Return On Assets of ARES (1.76%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 20.83%, ARES belongs to the top of the industry, outperforming 88.58% of the companies in the same industry.
With a Return On Invested Capital value of 4.30%, ARES perfoms like the industry average, outperforming 54.79% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARES is below the industry average of 6.76%.
The last Return On Invested Capital (4.30%) for ARES is above the 3 year average (3.86%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 1.76%
ROE 20.83%
ROIC 4.3%
ROA(3y)1.41%
ROA(5y)1.2%
ROE(3y)17.93%
ROE(5y)15.88%
ROIC(3y)3.86%
ROIC(5y)3.23%
ARES Yearly ROA, ROE, ROICARES Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20

1.3 Margins

The Profit Margin of ARES (11.75%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ARES has grown nicely.
ARES's Operating Margin of 26.69% is in line compared to the rest of the industry. ARES outperforms 48.40% of its industry peers.
In the last couple of years the Operating Margin of ARES has grown nicely.
Industry RankSector Rank
OM 26.69%
PM (TTM) 11.75%
GM N/A
OM growth 3Y12.53%
OM growth 5Y22.48%
PM growth 3Y22.4%
PM growth 5Y33.31%
GM growth 3YN/A
GM growth 5YN/A
ARES Yearly Profit, Operating, Gross MarginsARES Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

1

2. Health

2.1 Basic Checks

There is no outstanding debt for ARES. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
ARES Yearly Shares OutstandingARES Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M
ARES Yearly Total Debt VS Total AssetsARES Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B

2.2 Solvency

Based on the Altman-Z score of 1.55, we must say that ARES is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.55, ARES is in the better half of the industry, outperforming 64.38% of the companies in the same industry.
The Debt to FCF ratio of ARES is 10.53, which is on the high side as it means it would take ARES, 10.53 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ARES (10.53) is comparable to the rest of the industry.
A Debt/Equity ratio of 6.69 is on the high side and indicates that ARES has dependencies on debt financing.
The Debt to Equity ratio of ARES (6.69) is worse than 88.13% of its industry peers.
Industry RankSector Rank
Debt/Equity 6.69
Debt/FCF 10.53
Altman-Z 1.55
ROIC/WACCN/A
WACCN/A
ARES Yearly LT Debt VS Equity VS FCFARES Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5B 10B 15B

2.3 Liquidity

A Current Ratio of 0.39 indicates that ARES may have some problems paying its short term obligations.
ARES has a Current ratio of 0.39. This is amonst the worse of the industry: ARES underperforms 80.82% of its industry peers.
A Quick Ratio of 0.39 indicates that ARES may have some problems paying its short term obligations.
The Quick ratio of ARES (0.39) is worse than 80.82% of its industry peers.
Industry RankSector Rank
Current Ratio 0.39
Quick Ratio 0.39
ARES Yearly Current Assets VS Current LiabilitesARES Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

5

3. Growth

3.1 Past

ARES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.77%, which is quite good.
The Earnings Per Share has been growing by 18.77% on average over the past years. This is quite good.
EPS 1Y (TTM)8.77%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%1.65%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%19.45%

3.2 Future

Based on estimates for the next years, ARES will show a very strong growth in Earnings Per Share. The EPS will grow by 26.73% on average per year.
ARES is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.38% yearly.
EPS Next Y33.87%
EPS Next 2Y30.3%
EPS Next 3Y26.73%
EPS Next 5YN/A
Revenue Next Year32.89%
Revenue Next 2Y28.3%
Revenue Next 3Y27.38%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
ARES Yearly Revenue VS EstimatesARES Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2B 4B 6B
ARES Yearly EPS VS EstimatesARES Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2 4 6 8

2

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 43.85, ARES can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of ARES indicates a slightly more expensive valuation: ARES is more expensive than 79.45% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ARES to the average of the S&P500 Index (29.63), we can say ARES is valued slightly more expensively.
With a Price/Forward Earnings ratio of 32.76, ARES can be considered very expensive at the moment.
ARES's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ARES is more expensive than 73.06% of the companies in the same industry.
ARES's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 22.68.
Industry RankSector Rank
PE 43.85
Fwd PE 32.76
ARES Price Earnings VS Forward Price EarningsARES Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ARES is valued a bit cheaper than the industry average as 61.19% of the companies are valued more expensively.
ARES's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 41.34
EV/EBITDA 54.96
ARES Per share dataARES EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6 8 10

4.3 Compensation for Growth

ARES's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ARES's earnings are expected to grow with 26.73% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.29
PEG (5Y)2.34
EPS Next 2Y30.3%
EPS Next 3Y26.73%

3

5. Dividend

5.1 Amount

ARES has a Yearly Dividend Yield of 2.49%.
ARES's Dividend Yield is slightly below the industry average, which is at 9.98.
Compared to an average S&P500 Dividend Yield of 2.27, ARES has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.49%

5.2 History

The dividend of ARES decreases each year by -1.20%.
ARES has paid a dividend for at least 10 years, which is a reliable track record.
ARES has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)-1.2%
Div Incr Years5
Div Non Decr Years5
ARES Yearly Dividends per shareARES Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3

5.3 Sustainability

ARES pays out 286.79% of its income as dividend. This is not a sustainable payout ratio.
DP286.79%
EPS Next 2Y30.3%
EPS Next 3Y26.73%
ARES Yearly Income VS Free CF VS DividendARES Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B -1B -2B
ARES Dividend Payout.ARES Dividend Payout, showing the Payout Ratio.ARES Dividend Payout.PayoutRetained Earnings

ARES MANAGEMENT CORP - A

NYSE:ARES (2/21/2025, 8:04:00 PM)

After market: 174.09 0 (0%)

174.09

-5.6 (-3.12%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)02-05 2025-02-05/bmo
Earnings (Next)04-30 2025-04-30/bmo
Inst Owners85.3%
Inst Owner Change-93.38%
Ins Owners3.33%
Ins Owner Change-5.2%
Market Cap54.50B
Analysts77.39
Price Target204.55 (17.5%)
Short Float %2.19%
Short Ratio3.56
Dividend
Industry RankSector Rank
Dividend Yield 2.49%
Yearly Dividend3.42
Dividend Growth(5Y)-1.2%
DP286.79%
Div Incr Years5
Div Non Decr Years5
Ex-Date03-17 2025-03-17 (1.12)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.27%
Min EPS beat(2)-1.29%
Max EPS beat(2)-1.26%
EPS beat(4)1
Avg EPS beat(4)-2.23%
Min EPS beat(4)-14.66%
Max EPS beat(4)8.3%
EPS beat(8)3
Avg EPS beat(8)-1.84%
EPS beat(12)5
Avg EPS beat(12)0.09%
EPS beat(16)7
Avg EPS beat(16)1.79%
Revenue beat(2)1
Avg Revenue beat(2)16.74%
Min Revenue beat(2)-4.6%
Max Revenue beat(2)38.08%
Revenue beat(4)2
Avg Revenue beat(4)10.68%
Min Revenue beat(4)-10.28%
Max Revenue beat(4)38.08%
Revenue beat(8)4
Avg Revenue beat(8)12.15%
Revenue beat(12)7
Avg Revenue beat(12)19%
Revenue beat(16)11
Avg Revenue beat(16)37.69%
PT rev (1m)9.68%
PT rev (3m)15%
EPS NQ rev (1m)-2.66%
EPS NQ rev (3m)-2.78%
EPS NY rev (1m)-1.05%
EPS NY rev (3m)-1.55%
Revenue NQ rev (1m)-1.25%
Revenue NQ rev (3m)-1.25%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-0.27%
Valuation
Industry RankSector Rank
PE 43.85
Fwd PE 32.76
P/S 14.81
P/FCF 41.34
P/OCF 38.29
P/B 26.25
P/tB N/A
EV/EBITDA 54.96
EPS(TTM)3.97
EY2.28%
EPS(NY)5.31
Fwd EY3.05%
FCF(TTM)4.21
FCFY2.42%
OCF(TTM)4.55
OCFY2.61%
SpS11.75
BVpS6.63
TBVpS-0.09
PEG (NY)1.29
PEG (5Y)2.34
Profitability
Industry RankSector Rank
ROA 1.76%
ROE 20.83%
ROCE 4.97%
ROIC 4.3%
ROICexc 4.69%
ROICexgc 5.56%
OM 26.69%
PM (TTM) 11.75%
GM N/A
FCFM 35.83%
ROA(3y)1.41%
ROA(5y)1.2%
ROE(3y)17.93%
ROE(5y)15.88%
ROIC(3y)3.86%
ROIC(5y)3.23%
ROICexc(3y)4.16%
ROICexc(5y)3.49%
ROICexgc(3y)4.82%
ROICexgc(5y)3.92%
ROCE(3y)4.47%
ROCE(5y)3.74%
ROICexcg growth 3Y26.73%
ROICexcg growth 5Y38.31%
ROICexc growth 3Y23.71%
ROICexc growth 5Y35.42%
OM growth 3Y12.53%
OM growth 5Y22.48%
PM growth 3Y22.4%
PM growth 5Y33.31%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.15
Health
Industry RankSector Rank
Debt/Equity 6.69
Debt/FCF 10.53
Debt/EBITDA 11.44
Cap/Depr 45.4%
Cap/Sales 2.86%
Interest Coverage 250
Cash Conversion 117.26%
Profit Quality 304.92%
Current Ratio 0.39
Quick Ratio 0.39
Altman-Z 1.55
F-Score8
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)21.16%
Cap/Depr(5y)28.92%
Cap/Sales(3y)1.22%
Cap/Sales(5y)1.1%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)8.77%
EPS 3Y15.6%
EPS 5Y18.77%
EPS Q2Q%1.65%
EPS Next Y33.87%
EPS Next 2Y30.3%
EPS Next 3Y26.73%
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%19.45%
Revenue Next Year32.89%
Revenue Next 2Y28.3%
Revenue Next 3Y27.38%
Revenue Next 5YN/A
EBIT growth 1Y11.07%
EBIT growth 3Y43.16%
EBIT growth 5Y59.87%
EBIT Next Year50.9%
EBIT Next 3Y34.72%
EBIT Next 5YN/A
FCF growth 1Y198.66%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y209.85%
OCF growth 3YN/A
OCF growth 5YN/A