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

Zacks Equity Research

In the latest trading session, Ares Capital (ARCC) closed at $18.38, marking a -0.27% move from the previous day. This change lagged the S&P 500's daily gain of 0.41%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.7%.

Prior to today's trading, shares of the private equity firm had lost 2.8% over the past month. This has lagged the Finance sector's gain of 2.17% and the S&P 500's gain of 2.04% in that time.

Wall Street will be looking for positivity from ARCC as it approaches its next earnings report date. This is expected to be October 30, 2019. On that day, ARCC is projected to report earnings of $0.46 per share, which would represent year-over-year growth of 2.22%. Meanwhile, our latest consensus estimate is calling for revenue of $370.25 million, up 8.26% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.86 per share and revenue of $1.50 billion, which would represent changes of +10.71% and +12.12%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ARCC. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. ARCC is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that ARCC has a Forward P/E ratio of 9.9 right now. For comparison, its industry has an average Forward P/E of 9.9, which means ARCC is trading at a no noticeable deviation to the group.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 95, 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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