Ares Capital (ARCC) Gains But Lags Market: What You Should Know – January 20, 2023

In the latest trading session, Ares Capital (ARCC Free Report) closed at $19.03, marking a +1.28% move from the previous day. This move lagged the S&P 500’s daily gain of 1.89%. At the same time, the Dow added 1%, and the tech-heavy Nasdaq gained 10%.

Heading into today, shares of the private equity firm had gained 3.36% over the past month, lagging the Finance sector’s gain of 5.45% and outpacing the S&P 500’s gain of 2.3% in that time.

Investors will be hoping for strength from Ares Capital as it approaches its next earnings release, which is expected to be February 7, 2023. In that report, analysts expect Ares Capital to post earnings of $0.59 per share. This would mark year-over-year growth of 13.46%. Our most recent consensus estimate is calling for quarterly revenue of $577.74 million, up 9.21% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Ares Capital. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.47% higher. Ares Capital currently has a Zacks Rank of #3 (Hold).

Investors should also note Ares Capital’s current valuation metrics, including its Forward P/E ratio of 8.26. For comparison, its industry has an average Forward P/E of 7.82, which means Ares Capital is trading at a premium to the group.

The Financial – SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 34, which puts it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within 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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