Here's Why Ares Capital (ARCC) Gained But Lagged the Market Today
In the latest market close, Ares Capital (ARCC) reached $20.21, with a +0.45% movement compared to the previous day. This change lagged the S&P 500's 1.37% gain on the day. Meanwhile, the Dow experienced a rise of 1.4%, and the technology-dominated Nasdaq saw an increase of 1.38%.
The private equity firm's shares have seen an increase of 1.87% over the last month, not keeping up with the Finance sector's gain of 8.09% and the S&P 500's gain of 5.37%.
The upcoming earnings release of Ares Capital will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.59, reflecting a 6.35% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $683.52 million, up 6.8% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.34 per share and a revenue of $2.59 billion, representing changes of +15.84% and +23.59%, respectively, from the prior year.
Any recent changes to analyst estimates for Ares Capital should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Right now, Ares Capital possesses a Zacks Rank of #3 (Hold).
Investors should also note Ares Capital's current valuation metrics, including its Forward P/E ratio of 8.61. Its industry sports an average Forward P/E of 7.45, so one might conclude that Ares Capital is trading at a premium comparatively.
The Financial - SBIC & Commercial Industry industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 20, positioning it in the top 8% of all 250+ industries.
The Zacks Industry Rank is ordered 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.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Ares Capital Corporation (ARCC) : Free Stock Analysis Report
