One-glance verdict
Undervalued
$282.85 our estimate vs market $124.21
Wall Street consensus: $147.78 (-47.8% lower than our fair-value estimate)
56% below our estimate, below the bear case
Fundamentals snapshot
Ares Management Corporation
ARES · NYQ · Financial Services · Asset Management
Current price
$124.21
52-week range
$95.80 - $186.85
Market cap
$41.21B
Balance sheet
Distressed
1.16x Concerning
Net debt $13.02B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 11.5% last year.
- Reward Returns 14.9% on equity, ahead of 66% of its peers.
- Risk Insider ownership is only 11.2% (peer median: 23.1%).
- Risk Net debt grew 4.5% over 3 years.
What this company does
Ares Management Corporation
Ares Management is an investment firm that manages money for clients by investing in areas outside the public stock market, such as lending directly to businesses and buying ownership in private companies and real estate. The company makes its money by charging fees for managing these large investments and by taking a share of the profits when its investments perform well. This means Ares's success depends on its skill in picking and improving these private assets, offering a different way for its clients to grow their money compared to traditional stocks.
How the company got here
Ares Management was started in 1997 by Antony Ressler, John Kissick, and others to focus on alternative investments, which are investments outside of traditional stocks and bonds. A key moment was the creation of Ares Capital Corporation in 2004, which provided a steady source of money to lend to medium-sized businesses. The company went public in 2014, selling its stock on the New York Stock Exchange to raise more money for growth. Over the years, Ares has grown by acquiring other companies to expand into new areas like Asian investments, real estate, and infrastructure (the physical systems and services that a country or organization needs to operate).
What it actually does
Ares Management is a global alternative investment manager, which means it manages money for large investors like pension funds and wealthy families, putting that money into investments other than the typical stocks and bonds. Think of them as a specialized money manager that finds and manages unique investment opportunities. They make money by charging their clients management fees (a percentage of the money they manage) and performance fees (a share of the profits when their investments do well). Their main service is providing clients access to investment strategies in areas like private credit, private equity, and real estate that are not easily accessible to the average person.
Credit Group
This is the largest and most central part of Ares' business, making up the majority of its revenue. The Credit Group lends money directly to medium-sized companies, much like a bank would, but often with more flexible terms. These companies pay Ares interest on the loans, which generates income for Ares and its investors. This segment is a significant driver of the company's business, known for its record-setting lending activity.
Real Assets Group
This division focuses on investing in tangible, physical assets, primarily real estate and infrastructure (like power plants, pipelines, or digital networks). They buy properties to improve and resell them, or they lend money to other real estate developers. This segment makes money from rental income, property sales, and interest on loans, and it represents a significant portion of the company's business, second only to the Credit Group.
Private Equity Group
The Private Equity Group buys ownership stakes in companies, often those that are struggling or have potential to grow. They work with the company's management to improve the business over several years with the goal of selling their stake for a profit later on. This is a smaller part of Ares' overall business compared to its credit and real assets divisions.
Secondaries Group
This group, formed through the acquisition of Landmark Partners, operates in a specialized market. Instead of investing directly into companies or properties, they buy existing investment stakes from other investors who want to cash out early. This provides a way for investors to get liquidity (the ability to easily convert an asset into cash) from typically long-term investments. This is a newer and smaller, but growing, part of the Ares platform.
What management is betting on now
Ares is focused on growing by expanding its assets under management (the total amount of money it invests for its clients), particularly from wealthy individuals and family offices. The company is also broadening its real assets business beyond traditional real estate to include more infrastructure projects. Additionally, Ares is investing in technology like artificial intelligence to improve efficiency and sees continued growth opportunities in unique areas like sports and entertainment investing.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$1.29B
Net income
$150.63M
Diluted EPS
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Operating cash flow
$-351.44M
Free cash flow
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Sources
Revenue
$1.30B
Net income
$142.59M
Diluted EPS
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Operating cash flow
$406.51M
Free cash flow
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Revenue
$1.56B
Net income
$54.25M
Diluted EPS
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Operating cash flow
$-483.69M
Free cash flow
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Revenue
$1.15B
Net income
$288.88M
Diluted EPS
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Operating cash flow
$1.34B
Free cash flow
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Revenue
$1.04B
Net income
$137.06M
Diluted EPS
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Operating cash flow
$415.70M
Free cash flow
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Revenue
$1.00B
Net income
$47.17M
Diluted EPS
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Operating cash flow
$1.99B
Free cash flow
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Revenue
$1.24B
Net income
$177.32M
Diluted EPS
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Operating cash flow
$807.62M
Free cash flow
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Revenue
$841.97M
Net income
$118.46M
Diluted EPS
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Operating cash flow
$841.32M
Free cash flow
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Is it cheap or expensive?
Fair value $282.85 vs current price $124.21
Wall Street consensus is the average analyst price target: $147.78 (-47.8% lower than our fair-value estimate).
Our most-likely fair value is $282.85 a share — about 127.7% above today's price of $124.21, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $13.0B. Interest coverage 1.2x.
Net debt
$13.02B
Interest coverage
1.16x
Ares Management Corporation's profit covers its interest bill about 1.2 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
ARES
BASELINE
Ares Management Corporation
Total debt $14.87B Interest coverage 1.16x This is the baseline the peer rows are being compared against.
Total debt $41.88B Interest coverage 22.32x +1,819% vs ARES Carries about 19.2x more debt cushion than ARES.
Total debt $56.16B Interest coverage 0.16x -86% vs ARES Carries about 7.3x less debt cushion than ARES.
Total debt $4.09B Interest coverage 11.24x +866% vs ARES Carries about 9.7x more debt cushion than ARES.
Total debt $4.34B Interest coverage 2.79x +140% vs ARES Carries about 2.4x more debt cushion than ARES.
What you should know
The case for and against ARES
3 Rewards
2 Risks
Rewards
-
Revenue grew 11.5% last year.
-
Returns 14.9% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 2/10 years.
Risks
-
Insider ownership is only 11.2% (peer median: 23.1%).
-
Net debt grew 4.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
56.98x
Forward P/E
17.27x
P/B
11.26x
P/S
6.88x
EV/EBITDA
33.13x
PEG ratio
0.98x
Profitability
How much profit each dollar creates
Gross margin
37.4%
Operating margin
19.4%
Net margin
10.6%
ROE
14.9%
ROA
2.6%
Health
Liquidity and balance-sheet strength
Debt / equity
1.72x
Current ratio
0.54x
Quick ratio
0.47x
Total debt
$14.87B
Total cash
$1.85B
Growth
How the business has been compounding
Revenue TTM
$5.30B
Revenue 5Y CAGR
20.1%
EPS TTM
2.18
EPS 5Y CAGR
25.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$912.12M
Free CF TTM
$3.19B
FCF margin
60.2%
Dividend
Shareholder payout
Yield
4.2%
Payout ratio
226.6%
Last ex-div date
2026-09-16