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Ares Capital (ARCC) Outpaces Stock Market Gains: What You Should Know

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Ares Capital (ARCC) closed the most recent trading day at $17.42, moving +1.75% from the previous trading session. This change outpaced the S&P 500's 0.22% gain on the day. At the same time, the Dow lost 0.13%, and the tech-heavy Nasdaq gained 0.22%.

Prior to today's trading, shares of the private equity firm had lost 3.7% over the past month. This has was narrower than the Finance sector's loss of 9.02% and the S&P 500's loss of 10.02% in that time.

Investors will be hoping for strength from Ares Capital as it approaches its next earnings release. The company is expected to report EPS of $0.43, down 18.87% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $466.61 million, up 1.66% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.77 per share and revenue of $1.89 billion, which would represent changes of +6.63% and +3.98%, respectively, from the prior year.

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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.72% lower. Ares Capital is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Ares Capital's current valuation metrics, including its Forward P/E ratio of 9.85. This represents a premium compared to its industry's average Forward P/E of 9.55.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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 Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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