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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

We assign a fundamental rating of 3 out of 10 to ARES. ARES was compared to 225 industry peers in the Capital Markets industry. ARES has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARES is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

4

1. Profitability

1.1 Basic Checks

ARES had positive earnings in the past year.
In the past year ARES had a positive cash flow from operations.
Of the past 5 years ARES 4 years were profitable.
In the past 5 years ARES always reported negative operating cash flow.
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

Looking at the Return On Assets, with a value of 1.76%, ARES is in line with its industry, outperforming 42.47% of the companies in the same 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.
ARES's Return On Invested Capital of 4.30% is in line compared to the rest of the industry. ARES outperforms 54.79% of its industry peers.
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

Looking at the Profit Margin, with a value of 11.75%, ARES is in line with its industry, outperforming 42.47% of the companies in the same industry.
ARES's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 26.69%, ARES is in line with its industry, outperforming 48.40% of the companies in the same industry.
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.
ARES has a debt to FCF ratio of 10.53. This is a negative value and a sign of low solvency as ARES would need 10.53 years to pay back of all of its debts.
ARES has a Debt to FCF ratio (10.53) which 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

ARES has a Current Ratio of 0.39. This is a bad value and indicates that ARES is not financially healthy enough and could expect problems in meeting 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.
Looking at the Quick ratio, with a value of 0.39, ARES is doing worse than 80.82% of the companies in the same industry.
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

The Earnings Per Share is expected to grow by 26.73% on average over the next years. This is a very strong growth
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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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.
ARES's Price/Earnings ratio is a bit more expensive when compared to the industry. ARES is more expensive than 79.45% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, ARES is valued a bit more expensive.
The Price/Forward Earnings ratio is 32.76, which means the current valuation is very expensive for ARES.
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.
The average S&P500 Price/Forward Earnings ratio is at 22.68. ARES is valued slightly more expensive when compared to this.
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

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARES indicates a somewhat cheap valuation: ARES is cheaper than 61.19% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as ARES.
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

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

3

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.49%, ARES has a reasonable but not impressive dividend return.
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

286.79% of the earnings are spent on dividend by ARES. 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