Ares Management (ARES) AI Stock Analysis

• Market Cap: $55.15B
• Dividend Yield: 2.65%
• Average Volume (3M): 3.90M
• Price to Earnings (P/E): 71.9
• Beta (1Y): 1.61
• Revenue Growth: 50.70%
• EPS Growth: 7.32%
• Country: US
• Employees: 3,504
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 1.19
• Shares Outstanding: 216,852,340
• 10 Day Avg. Volume: 2,172,337
• 30 Day Avg. Volume: 3,897,786
• PEG Ratio: -4.77
• Price to Book (P/B): 9.89
• Price to Sales (P/S): 9.03
• P/FCF Ratio: 12.99
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $192.42
• Price Target Upside: 13.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 5.06
• Revenue Forecast (FY): $4.53B

• Rating: 70 Outperform
• Price Target: $187.00 ▲(10.62% Upside)

Ares Management's strong financial performance, particularly in revenue growth and profitability, is a key strength. The technical indicators support a bullish outlook, although the high P/E ratio suggests caution regarding valuation. The positive earnings call further enhances the stock's attractiveness, despite high leverage concerns.

Positive Factors

Revenue Growth

Strong revenue growth in management fees and earnings indicates robust business expansion and effective investment strategies, supporting long-term financial health.

Infrastructure Expansion

Expanding into data centers enhances Ares' infrastructure capabilities, diversifying revenue streams and strengthening its competitive position in the digital infrastructure sector.

Capital Raising

Record capital raising demonstrates strong investor confidence and provides the firm with significant resources to pursue growth opportunities and enhance its market position.

Negative Factors

High Leverage

High leverage remains a potential risk, as it can strain cash flow and limit financial flexibility, impacting the company's ability to weather economic downturns.

Margin Pressure

Decreasing EBIT margins suggest operational efficiency challenges, which could affect profitability and require strategic adjustments to maintain competitive advantage.

Credit Market Concerns

Potential credit market risks could impact Ares' credit strategies, necessitating careful risk management to avoid adverse effects on financial performance.

Ares Management Business Overview & Revenue Model

Company Description

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets. Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies. The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies. Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate. The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia. Ares Management GP LLC is the general partner of the company.

How the Company Makes Money

Ares Management generates revenue primarily through management fees and performance fees. Management fees are earned from the assets under management (AUM) across its investment funds, which are typically a percentage of the AUM. Performance fees, also known as carried interest, are earned when investment funds exceed predefined performance benchmarks, providing an additional revenue stream tied to the firm's investment performance. Additionally, Ares benefits from a diversified approach by investing in various sectors and geographies, which helps mitigate risk and enhance returns. The firm has established significant partnerships with institutional investors, including pension funds and sovereign wealth funds, which contribute to its capital raising efforts and overall earnings potential.

Ares Management Financial Statement Overview

Summary

Ares Management shows strong revenue growth and profitability, with improved leverage and cash flow management. However, high leverage remains a concern, and operational efficiency needs attention.

Income Statement

Ares Management has demonstrated strong revenue growth with a 10.94% increase in TTM, indicating robust business expansion. The gross profit margin of 54.74% and net profit margin of 12.14% reflect solid profitability. However, the EBIT margin has decreased from 58.01% in 2024 to 43.10% in TTM, suggesting some pressure on operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio of 3.09 in TTM, which is a significant improvement from 8.32 in 2023, indicating better leverage management. Return on equity is strong at 18.02%, showing effective use of equity to generate profits. However, the high leverage remains a potential risk.

Cash Flow

Ares Management's operating cash flow has improved significantly to $4.56 billion in TTM, with a free cash flow growth of 12.94%. The operating cash flow to net income ratio of 0.88 indicates a healthy cash generation relative to net income. However, past negative cash flows highlight a need for sustained cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.36B	3.88B	3.63B	3.06B	4.21B	1.76B
Gross Profit	2.93B	2.15B	2.15B	1.56B	3.05B	996.79M
EBITDA	1.92B	1.49B	1.42B	735.39M	1.03B	262.38M
Net Income	650.43M	463.74M	474.33M	167.54M	408.84M	152.14M
Balance Sheet
Total Assets	27.03B	24.88B	24.73B	22.00B	21.61B	15.17B
Cash, Cash Equivalents and Short-Term Investments	1.50B	2.74B	1.50B	1.11B	1.39B	1.06B
Total Debt	12.73B	13.15B	15.76B	13.33B	12.49B	10.90B
Total Liabilities	18.43B	18.06B	20.26B	18.20B	17.79B	12.70B
Stockholders Equity	4.47B	3.54B	1.89B	1.59B	1.83B	1.19B
Cash Flow
Free Cash Flow	4.49B	2.70B	-300.44M	-769.91M	-2.62B	-441.60M
Operating Cash Flow	4.56B	2.79B	-233.26M	-734.11M	-2.60B	-425.66M
Investing Cash Flow	-1.85B	-159.40M	-111.08M	-337.38M	-1.08B	-136.76M
Financing Cash Flow	-2.49B	-1.43B	292.13M	1.13B	3.50B	943.89M

Ares Management Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 169.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARES, the sentiment is Positive. The current price of 169.05 is above the 20-day moving average (MA) of 167.97, above the 50-day MA of 156.48, and above the 200-day MA of 161.87, indicating a bullish trend. The MACD of 3.63 indicates Positive momentum. The RSI at 58.66 is Neutral, neither overbought nor oversold. The STOCH value of 49.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARES.

Ares Management Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BX	72 Outperform	$189.57B	44.57	35.17%	3.02%	33.12%	19.86%
ARES	70 Outperform	$55.15B	71.89	18.64%	2.65%	50.70%	7.32%
OWL	69 Neutral	$23.44B	334.00	2.41%	5.45%	27.24%	-59.82%
KKR	69 Neutral	$116.24B	55.56	8.73%	0.56%	-33.80%	-24.81%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TPG	61 Neutral	$24.74B	683.19	7.19%	3.03%	25.02%	235.70%
CG	59 Neutral	$22.02B	33.99	11.85%	2.30%	-24.62%	437.16%