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Ares Management (ARES)
NYSE:ARES
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Ares Management
(NYSE:ARES)
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Rating:63Neutral
Price Target:
$179.00
â–¼(-1.19% Downside)
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 indicates strong market demand and effective investment strategies, enhancing long-term revenue potential through increased management fees.
Fee-Related Earnings Growth
Robust growth in fee-related earnings demonstrates the company's ability to capitalize on its investment strategies, contributing to sustainable profitability and financial stability.
Global Wealth and Insurance Expansion
Expansion in global wealth and insurance businesses diversifies revenue streams and reduces risk exposure, supporting long-term growth and resilience against market fluctuations.
Negative Factors
Margin Compression
Margin compression due to integration challenges may affect short-term profitability, requiring efficient management to maintain long-term margin stability.
Free Cash Flow Growth Challenges
Negative free cash flow growth could limit reinvestment opportunities and financial flexibility, necessitating improved cash management to support future growth.
Equity Ratio Concerns
A low equity ratio indicates potential vulnerability to market volatility, which could impact financial stability and require strategic adjustments to mitigate risk.
Ares Management (ARES) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$59.46B
Dividend Yield2.37%
Average Volume (3M)1.30M
Price to Earnings (P/E)104.7
Beta (1Y)1.55
Revenue Growth45.89%
EPS Growth-9.53%
CountryUS
Employees3,504
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)1.03
Shares Outstanding215,934,700
10 Day Avg. Volume1,257,189
30 Day Avg. Volume1,304,674
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue11.25
Enterprise Value/Gross Profit26.83
Enterprise Value/Ebitda40.82
Forecast
1Y Price Target
$201.27Price Target Upside11.11% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Ares Management Business Overview & Revenue Model
Company DescriptionAres 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 MoneyAres 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 Earnings Call Summary
Earnings Call Date:Aug 01, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in fundraising, AUM growth, and earnings, along with strong performance across various investment strategies. While there were some temporary challenges such as deployment slowdown and margin compression due to the GCP integration, the overall sentiment is positive, driven by robust growth and successful strategic initiatives.Q2-2025 Updates
Positive Updates
Record Fundraising and AUM Growth
Ares achieved the second highest quarterly fundraising total on record, raising over $26 billion. The company is on pace to meet or exceed last year's record fundraising of $92.7 billion. AUM increased to $572 billion, representing a 19% organic growth on an annualized basis.
Strong Growth in Fee-Related Earnings (FRE)
Fee-related earnings increased by 26% year-over-year, with management fees reaching a record $900 million, representing a 24% increase from the previous year.
Expansion in Global Wealth and Insurance Businesses
The wealth channel experienced a 54% increase in equity commitments over the first half of 2024, and AUM across eight semi-liquid products surpassed $50 billion. The insurance strategy through Aspida generated over $1.9 billion in new premiums.
Robust Performance Across Investment Strategies
Credit strategies produced double-digit returns ranging from 10% to 23% over the last 12 months. Real estate and corporate private equity also showed strong performance, with positive growth in property values and rent.
Successful Integration of GCP
The GCP acquisition contributed $103 million in revenues and $34 million in FRE, with expectations of generating an additional $40 million in management fees by Q1 '26.
Negative Updates
Temporary Deployment Slowdown
There was a temporary slowdown in transaction activity in the U.S. during April due to market adjustments from new tariff policies, impacting the deployment environment.
FRE Margin Compression
The integration of GCP temporarily compressed FRE margins by 90 basis points, although this is expected to be temporary.
Company Guidance
During the Ares Management Corporation's second-quarter 2025 earnings call, the company reported a robust financial performance, marked by significant growth in assets under management (AUM) and fee-paying AUM. Ares achieved its second-highest quarterly fundraising total on record, raising over $26 billion across more than 20 strategies and 40 funds. Year-to-date, gross commitments reached $46 billion, putting the company on track to meet or surpass last year's record of $92.7 billion. AUM increased to $572 billion, reflecting a 19% organic growth on an annualized basis, while fee-paying AUM rose to $350 billion, exhibiting a 17% organic growth. Management fees grew by 24%, total fee-related revenue by 29%, and fee-related earnings (FRE) by 26%. The company's net accrued performance income balance also climbed by 8.5% to $1.1 billion. Furthermore, Ares declared a quarterly dividend of $1.12 per share, representing a 20% increase compared to the same quarter in the previous year.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.75
Positive
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.60
Neutral
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.65
Positive
| 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
Negative
181.15
Price Trends
181.51
Negative
174.44
Negative
169.14
Negative
Market Momentum
-0.72
Positive
34.48
Neutral
36.72
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 181.15 is above the 20-day moving average (MA) of 178.57, below the 50-day MA of 181.51, and above the 200-day MA of 169.14, indicating a bearish trend. The MACD of -0.72 indicates Positive momentum. The RSI at 34.48 is Neutral, neither overbought nor oversold. The STOCH value of 36.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARES.
Ares Management Risk Analysis
Ares Management disclosed 1 risk factors in its most recent earnings report. Ares Management reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ares Management Peers Comparison
Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 218.71B | 49.91 | 34.29% | 2.39% | 23.08% | 41.35% | |
76 Outperform | 23.15B | 19.60 | 18.20% | 2.19% | 101.10% | 0.00% | |
68 Neutral | 26.79B | 335.25 | 3.21% | 4.68% | 31.81% | -32.87% | |
63 Neutral | $59.46B | 104.69 | 13.92% | 2.37% | 45.89% | -9.53% | |
63 Neutral | 22.86B | -329.52 | 0.00% | 3.16% | 43.48% | -24.02% | |
62 Neutral | 122.90B | 70.62 | 7.27% | 0.52% | -24.62% | -48.96% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
ARES
Ares Management
168.23
14.21
9.23%
KKR
KKR & Co
137.94
6.98
5.33%
BX
Blackstone Group
178.08
29.34
19.73%
CG
Carlyle Group
64.00
22.70
54.96%
OWL
Blue Owl Capital
17.29
-1.22
-6.59%
TPG
TPG
60.50
3.86
6.81%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.