Uncovering Potential: Ares Capital's Earnings Preview

Ares Capital ARCC is preparing to release its quarterly earnings on Tuesday, 2025-04-29. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect Ares Capital to report an earnings per share (EPS) of $0.54.

The market awaits Ares Capital's announcement, with hopes high for news of surpassing estimates and providing upbeat guidance for the next quarter.

It's important for new investors to understand that guidance can be a significant driver of stock prices.

Historical Earnings Performance

In the previous earnings release, the company missed EPS by $0.03, leading to a 1.6% drop in the share price the following trading session.

Here's a look at Ares Capital's past performance and the resulting price change:

Stock Performance

Shares of Ares Capital were trading at $21.11 as of April 25. Over the last 52-week period, shares are up 2.64%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Views on Ares Capital

For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Ares Capital.

Ares Capital has received a total of 9 ratings from analysts, with the consensus rating as Outperform. With an average one-year price target of $22.83, the consensus suggests a potential 8.15% upside.

Peer Ratings Comparison

In this analysis, we delve into the analyst ratings and average 1-year price targets of Franklin Resources, SEI Investments and T. Rowe Price Group, three key industry players, offering insights into their relative performance expectations and market positioning.

• Analysts currently favor an Neutral trajectory for Franklin Resources, with an average 1-year price target of $19.62, suggesting a potential 7.06% downside.
• Analysts currently favor an Neutral trajectory for SEI Investments, with an average 1-year price target of $83.25, suggesting a potential 294.36% upside.
• Analysts currently favor an Neutral trajectory for T. Rowe Price Group, with an average 1-year price target of $96.14, suggesting a potential 355.42% upside.

Peers Comparative Analysis Summary

The peer analysis summary offers a detailed examination of key metrics for Franklin Resources, SEI Investments and T. Rowe Price Group, providing valuable insights into their respective standings within the industry and their market positions and comparative performance.

Key Takeaway:

Ares Capital ranks at the top for Revenue Growth and Gross Profit among its peers. It is in the middle for Return on Equity.

Discovering Ares Capital: A Closer Look

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 first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) and second lien senior secured loans. In addition to senior secured loans, the company also invests in subordinated loans and preferred equity, it also makes common equity investments.

Key Indicators: Ares Capital's Financial Health

Market Capitalization Analysis: Positioned below industry benchmarks, the company's market capitalization faces constraints in size. This could be influenced by factors such as growth expectations or operational capacity.

Revenue Growth: Ares Capital's revenue growth over a period of 3 months has faced challenges. As of 31 December, 2024, the company experienced a revenue decline of approximately -11.49%. This indicates a decrease in the company's top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Net Margin: The company's net margin is a standout performer, exceeding industry averages. With an impressive net margin of 90.84%, the company showcases strong profitability and effective cost control.

Return on Equity (ROE): Ares Capital's ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of 2.73%, the company may face hurdles in generating optimal returns for shareholders.

Return on Assets (ROA): Ares Capital's ROA lags behind industry averages, suggesting challenges in maximizing returns from its assets. With an ROA of 1.29%, the company may face hurdles in achieving optimal financial performance.

Debt Management: Ares Capital's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 1.03.

To track all earnings releases for Ares Capital visit their earnings calendar on our site.

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