Ares Capital (ARCC) closed at $17 in the latest trading session, marking a -0.35% move from the prior day. This move was narrower than the S&P 500's daily loss of 1.9%. Elsewhere, the Dow lost 1.77%, while the tech-heavy Nasdaq lost 2.5%.
Prior to today's trading, shares of the private equity firm had lost 1.61% over the past month. This has lagged the Finance sector's loss of 0.18% and the S&P 500's gain of 3.04% in that time.
Wall Street will be looking for positivity from ARCC as it approaches its next earnings report date. The company is expected to report EPS of $0.42, up 7.69% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $336.39 million, up 6.12% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.71 per share and revenue of $1.39 billion. These totals would mark changes of +1.79% and +4.34%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for ARCC. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 remained stagnant. ARCC is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, ARCC is currently trading at a Forward P/E ratio of 9.97. Its industry sports an average Forward P/E of 9.56, so we one might conclude that ARCC is trading at a premium comparatively.
Investors should also note that ARCC has a PEG ratio of 3.32 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Financial - SBIC & Commercial Industry was holding an average PEG ratio of 3.06 at yesterday's closing price.
The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 163, which puts it in the bottom 37% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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