Ares Management (ARES) AI Stock Analysis

• Market Cap: $48.12B
• Dividend Yield: 2.91%
• Average Volume (3M): 2.22M
• Price to Earnings (P/E): 86.1
• Beta (1Y): 1.62
• Revenue Growth: 45.89%
• EPS Growth: -9.53%
• Country: US
• Employees: 3,504
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 1.03
• Shares Outstanding: 215,934,700
• 10 Day Avg. Volume: 1,939,157
• 30 Day Avg. Volume: 2,220,541
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 11.25
• Enterprise Value/Gross Profit: 26.83
• Enterprise Value/Ebitda: 40.82
• 1Y Price Target: $190.09
• Price Target Upside: 29.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 63 Neutral
• Price Target: $179.00 ▲(21.53% Upside)

Ares Management's overall score is driven by strong financial performance and positive earnings call sentiment, despite technical indicators suggesting bearish momentum and a high P/E ratio indicating potential overvaluation.

Positive Factors

AUM Growth

The significant growth in assets under management (AUM) indicates strong market position and effective investment strategies, enhancing long-term revenue potential through increased management and performance fees.

Fee-Related Earnings

The substantial increase in fee-related earnings demonstrates the company's ability to capitalize on its growing AUM, ensuring a stable and expanding revenue stream, which is crucial for long-term financial health.

Global Expansion

The expansion in global wealth and insurance businesses highlights Ares Management's strategic growth initiatives, diversifying its revenue base and reducing reliance on any single market, which supports sustainable growth.

Negative Factors

Margin Compression

Margin compression due to integration activities can impact profitability. While temporary, it highlights potential challenges in maintaining cost efficiencies during expansion phases, affecting short-term financial performance.

Free Cash Flow Growth

Negative free cash flow growth suggests potential liquidity challenges, which could limit the company's ability to fund new investments or return capital to shareholders, impacting long-term financial flexibility.

Equity Ratio

A low equity ratio indicates higher financial leverage, increasing the company's vulnerability to market volatility and potential asset devaluation, which could strain financial stability and limit growth opportunities.

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-based fees. Management fees are charged as a percentage of assets under management (AUM) across its various investment funds. In addition to these fees, Ares earns performance fees, also known as carried interest, which are contingent upon the funds achieving certain investment performance benchmarks. This revenue model is complemented by strategic partnerships with institutional investors, pension funds, and sovereign wealth funds, which provide significant capital inflows. Ares also benefits from its ability to invest in multiple asset classes, allowing it to diversify its revenue streams and reduce dependence on any single market or sector.

Ares Management Financial Statement Overview

Summary

Ares Management demonstrates strong profitability with robust EBIT and EBITDA margins, despite volatile revenue growth. Improved net profit margin and significant free cash flow growth highlight efficient operations and cash generation. The high debt-to-equity ratio poses some leverage risk, but this is mitigated by improved return on equity.

Income Statement

Ares Management shows strong profitability with a consistent gross profit margin around 60% and improved net profit margin from 2.6% in 2022 to 10.5% in the TTM (Trailing-Twelve-Months). Revenue growth has been volatile, with a decline recently, but the EBIT and EBITDA margins have remained robust, indicating efficient operations.

Balance Sheet

The company has a high debt-to-equity ratio of 0.15 in the TTM, indicating reliance on leverage, though this has improved significantly from previous years. Return on equity has improved, reflecting better profitability on shareholder equity. However, the equity ratio remains moderate, suggesting potential leverage risk.

Cash Flow

Ares Management has demonstrated substantial free cash flow growth, with significant improvement in operating cash flow surpassing net income, indicating strong cash-generating capabilities. The free cash flow to net income ratio is favorable, showing efficient cash utilization despite past periods of negative cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.83B	3.88B	3.63B	3.06B	4.21B	1.76B
Gross Profit	2.03B	1.74B	1.54B	1.24B	1.38B	592.68M
EBITDA	1.33B	1.15B	1.15B	1.04B	982.19M	354.81M
Net Income	480.01M	463.74M	474.33M	167.54M	408.84M	152.14M
Balance Sheet
Total Assets	27.26B	24.88B	24.73B	22.00B	21.61B	15.17B
Cash, Cash Equivalents and Short-Term Investments	1.53B	2.74B	1.50B	1.11B	1.39B	1.06B
Total Debt	13.47B	13.15B	15.76B	13.33B	12.49B	10.90B
Total Liabilities	19.01B	18.06B	20.26B	18.20B	17.79B	12.70B
Stockholders Equity	4.36B	3.54B	1.89B	1.59B	1.83B	1.19B
Cash Flow
Free Cash Flow	3.98B	2.70B	-300.44M	-769.91M	-2.62B	-441.60M
Operating Cash Flow	4.06B	2.79B	-233.26M	-734.11M	-2.60B	-425.66M
Investing Cash Flow	-1.86B	-159.40M	-111.08M	-337.38M	-1.08B	-136.76M
Financing Cash Flow	-2.05B	-1.43B	292.13M	1.13B	3.50B	943.89M

Ares Management Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 147.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARES, the sentiment is Negative. The current price of 147.29 is below the 20-day moving average (MA) of 147.86, below the 50-day MA of 163.40, and below the 200-day MA of 165.86, indicating a neutral trend. The MACD of -3.75 indicates Negative momentum. The RSI at 42.67 is Neutral, neither overbought nor oversold. The STOCH value of 56.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARES.

Ares Management Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BX	―	$178.68B	42.06	35.17%	2.63%	31.91%	19.86%
CG	―	$19.29B	15.56	23.07%	2.47%	101.10%	―
Sector *	―	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
OWL	―	$24.58B	297.84	3.68%	5.11%	31.81%	-32.87%
ARES	―	$48.12B	86.11	13.92%	2.91%	45.89%	-9.53%
TPG	―	$20.96B	―	2.55%	3.44%	43.48%	-24.02%
KKR	―	$105.43B	56.75	8.22%	0.61%	-24.62%	-48.96%