In the latest trading session, Ares Capital (ARCC) closed at $19.70, marking a -1.7% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 0.58%. Elsewhere, the Dow saw a downswing of 1.18%, while the tech-heavy Nasdaq depreciated by 0.32%.
The stock of private equity firm has risen by 0.3% in the past month, leading the Finance sector's gain of 0.23% and the S&P 500's loss of 0.36%.
Market participants will be closely following the financial results of Ares Capital in its upcoming release. In that report, analysts expect Ares Capital to post earnings of $0.48 per share. This would mark a year-over-year decline of 4%. Simultaneously, our latest consensus estimate expects the revenue to be $780.31 million, showing a 0.22% drop compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.91 per share and a revenue of $3.1 billion, representing changes of -4.98% and +1.7%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Ares Capital. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Ares Capital currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Ares Capital currently has a Forward P/E ratio of 10.51. This denotes a premium relative to the industry average Forward P/E of 8.38.
The Financial - SBIC & Commercial Industry industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 37% 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.
To follow ARCC in the coming trading sessions, be sure to utilize Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).