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Here's Why Ares Capital (ARCC) Gained But Lagged the Market Today

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Ares Capital (ARCC - Free Report) ended the recent trading session at $20.71, demonstrating a +0.1% swing from the preceding day's closing price. This change lagged the S&P 500's 0.25% gain on the day. On the other hand, the Dow registered a gain of 0.2%, and the technology-centric Nasdaq increased by 0.56%.

Prior to today's trading, shares of the private equity firm had lost 1.34% over the past month. This has lagged the Finance sector's gain of 1.86% and the S&P 500's gain of 1.65% in that time.

The investment community will be paying close attention to the earnings performance of Ares Capital in its upcoming release. It is anticipated that the company will report an EPS of $0.59, marking stability compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $765.64 million, reflecting a 16.89% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.39 per share and a revenue of $3 billion, signifying shifts of +0.84% and +14.75%, respectively, from the last year.

Investors should also pay attention to any latest changes in analyst estimates for Ares Capital. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.44% higher. Ares Capital is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Ares Capital is holding a Forward P/E ratio of 8.64. Its industry sports an average Forward P/E of 8.05, 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. This industry, currently bearing a Zacks Industry Rank of 202, finds itself in the bottom 21% echelons 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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