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

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Ares Capital (ARCC) closed at $19.43 in the latest trading session, marking a -0.97% move from the prior day. This change lagged the S&P 500's 0.99% gain on the day. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq lost 0.31%.

Coming into today, shares of the private equity firm had gained 11.8% in the past month. In that same time, the Finance sector gained 4.89%, while the S&P 500 gained 7.91%.

Ares Capital will be looking to display strength as it nears its next earnings release, which is expected to be July 26, 2022. In that report, analysts expect Ares Capital to post earnings of $0.43 per share. This would mark a year-over-year decline of 18.87%. Meanwhile, our latest consensus estimate is calling for revenue of $467.37 million, up 1.82% from the prior-year quarter.

ARCC's full-year Zacks Consensus Estimates are calling for earnings of $1.77 per share and revenue of $1.9 billion. These results would represent year-over-year changes of +6.63% and +4.32%, respectively.

Any recent changes to analyst estimates for Ares Capital should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Ares Capital is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Ares Capital's current valuation metrics, including its Forward P/E ratio of 11.07. This represents a premium compared to its industry's average Forward P/E of 9.95.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This group has a Zacks Industry Rank of 134, putting it in the bottom 47% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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