Expert Outlook: Ares Capital Through The Eyes Of 5 Analysts

In the preceding three months, 5 analysts have released ratings for Ares Capital ARCC, presenting a wide array of perspectives from bullish to bearish.

The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.

The 12-month price targets assessed by analysts reveal further insights, featuring an average target of $22.2, a high estimate of $23.00, and a low estimate of $22.00. Surpassing the previous average price target of $21.50, the current average has increased by 3.26%.

Diving into Analyst Ratings: An In-Depth Exploration

The standing of Ares Capital among financial experts becomes clear with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts adapt their recommendations to changing market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their response to recent developments related to Ares Capital. This information provides a snapshot of how analysts perceive the current state of the company.
• Rating: Gaining insights, analysts provide qualitative assessments, ranging from 'Outperform' to 'Underperform'. These ratings reflect expectations for the relative performance of Ares Capital compared to the broader market.
• Price Targets: Analysts set price targets as an estimate of a stock's future value. Comparing the current and prior price targets provides insight into how analysts' expectations have changed over time. This information can be valuable for investors seeking to understand consensus views on the stock's potential future performance.

To gain a panoramic view of Ares Capital's market performance, explore these analyst evaluations alongside essential financial indicators. Stay informed and make judicious decisions using our Ratings Table.

Stay up to date on Ares Capital analyst ratings.

Delving into Ares Capital's Background

Ares Capital Corp is a United States-based closed-ended specialty finance company. Its investment objective is to generate both current income and capital appreciation through debt and equity investments. The company focuses on investing primarily in U.S. middle-market companies with investment opportunities as well as in larger companies. Its portfolio comprises of first lien senior secured loans, second lien senior secured loans, and mezzanine debt (subordinated unsecured loan), which may include equity components that are diversified by industry and sector. The company may invest in preferred and common equity investments to a lesser proportion. Its revenue mainly consists of interest and dividend income received from the investment made.

Ares Capital: Financial Performance Dissected

Market Capitalization Analysis: The company exhibits a lower market capitalization profile, positioning itself below industry averages. This suggests a smaller scale relative to peers.

Revenue Growth: Ares Capital's revenue growth over a period of 3 months has been noteworthy. As of 31 March, 2024, the company achieved a revenue growth rate of approximately 63.91%. This indicates a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Financials sector.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 90.71%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): The company's ROE is below industry benchmarks, signaling potential difficulties in efficiently using equity capital. With an ROE of 3.89%, the company may need to address challenges in generating satisfactory returns for shareholders.

Return on Assets (ROA): Ares Capital's ROA surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 1.87% ROA, the company effectively utilizes its assets for optimal returns.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.99.

Analyst Ratings: What Are They?

Analyst ratings serve as essential indicators of stock performance, provided by experts in banking and financial systems. These specialists diligently analyze company financial statements, participate in conference calls, and engage with insiders to generate quarterly ratings for individual stocks.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

If you want to keep track of which analysts are outperforming others, you can view updated analyst ratings along withanalyst success scores in Benzinga Pro.

This article was generated by Benzinga's automated content engine and reviewed by an editor.