The most recent trading session ended with Ares Capital (ARCC) standing at $22.29, reflecting a +0.59% shift from the previouse trading day's closing. This move outpaced the S&P 500's daily gain of 0.38%. Elsewhere, the Dow saw a downswing of 0.03%, while the tech-heavy Nasdaq appreciated by 0.87%.
Coming into today, shares of the private equity firm had lost 4.61% in the past month. In that same time, the Finance sector lost 3.41%, while the S&P 500 lost 5.59%.
The investment community will be closely monitoring the performance of Ares Capital in its forthcoming earnings report. On that day, Ares Capital is projected to report earnings of $0.54 per share, which would represent a year-over-year decline of 8.47%. In the meantime, our current consensus estimate forecasts the revenue to be $771.09 million, indicating a 10% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.18 per share and revenue of $3.16 billion, which would represent changes of -6.44% and +5.78%, respectively, from the prior year.
Any recent changes to analyst estimates for Ares Capital should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Within the past 30 days, our consensus EPS projection has moved 0.11% lower. Ares Capital presently features a Zacks Rank of #3 (Hold).
With respect to valuation, Ares Capital is currently being traded at a Forward P/E ratio of 10.15. This expresses a premium compared to the average Forward P/E of 8.84 of its industry.
The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This group has a Zacks Industry Rank of 148, putting it in the bottom 41% 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.
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Ares Capital Corporation (ARCC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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