Ares Capital (ARCC – Free Report) closed the most recent trading day at $19.61, moving +1.5% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 0.34%. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq added 8.98%.
Heading into today, shares of the private equity firm had gained 3.37% over the past month, lagging the Finance sector’s gain of 3.84% and outpacing the S&P 500’s gain of 1% in that time.
Ares Capital will be looking to display strength as it nears its next earnings release, which is expected to be February 7, 2023. The company is expected to report EPS of $0.58, up 11.54% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $573.91 million, up 8.49% from the year-ago period.
It is also important to note the recent changes to analyst estimates for Ares Capital. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.99% higher. Ares Capital currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, Ares Capital is holding a Forward P/E ratio of 8.53. This valuation marks a premium compared to its industry’s average Forward P/E of 7.91.
The Financial – SBIC & Commercial Industry industry is part of the Finance sector. This group has a Zacks Industry Rank of 29, putting it in the top 12% 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.
To follow ARCC in the coming trading sessions, be sure to utilize Zacks.com.