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Ares Capital (ARCC) Rises Yet Lags Behind Market: Some Facts Worth Knowing

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In the latest trading session, Ares Capital (ARCC - Free Report) closed at $21.05, marking a +0.81% move from the previous day. The stock's change was less than the S&P 500's daily gain of 0.9%. Meanwhile, the Dow gained 0.81%, and the Nasdaq, a tech-heavy index, added 1.22%.

The private equity firm's shares have seen an increase of 0.1% over the last month, not keeping up with the Finance sector's gain of 0.34% and the S&P 500's gain of 3.15%.

The investment community will be paying close attention to the earnings performance of Ares Capital in its upcoming release. The company is slated to reveal its earnings on October 30, 2024. The company is predicted to post an EPS of $0.59, indicating constancy compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $766.58 million, showing a 17.04% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $2.39 per share and a revenue of $3 billion, demonstrating changes of +0.84% and +14.76%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for Ares Capital. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 0.38% higher within the past month. At present, Ares Capital boasts a Zacks Rank of #4 (Sell).

In terms of valuation, Ares Capital is currently trading at a Forward P/E ratio of 8.73. For comparison, its industry has an average Forward P/E of 7.99, which means Ares Capital is trading at a premium to the group.

The Financial - SBIC & Commercial Industry industry is part of the Finance sector. At present, this industry carries a Zacks Industry Rank of 216, placing it within the bottom 15% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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