Why Ares Capital (ARCC) Outpaced the Stock Market Today

Core Viewpoint - Ares Capital is experiencing a mixed performance in the market, with a recent slight increase in stock price, but a notable decline over the past month, and upcoming earnings are anticipated to show a decline in earnings per share year-over-year while revenue is expected to grow [1][2]. Group 1: Stock Performance - Ares Capital's stock closed at $22.29, reflecting a +0.59% change from the previous trading day, outperforming the S&P 500's gain of 0.38% [1]. - Over the past month, Ares Capital shares have decreased by 4.61%, while the Finance sector and S&P 500 have lost 3.41% and 5.59%, respectively [1]. Group 2: Earnings and Revenue Estimates - Ares Capital is projected to report earnings of$ 0.54 per share, indicating a year-over-year decline of 8.47%, while revenue is expected to be $771.09 million, representing a 10% increase compared to the same quarter last year [2]. - For the full year, earnings are estimated at$ 2.18 per share and revenue at $3.16 billion, reflecting changes of -6.44% and +5.78% from the previous year [3]. Group 3: Analyst Estimates and Rankings - Recent changes in analyst estimates for Ares Capital are crucial, as positive revisions indicate optimism about the company's business and profitability [3]. - Ares Capital currently holds a Zacks Rank of 3 (Hold), with the consensus EPS projection having moved 0.11% lower in the past 30 days [5]. Group 4: Valuation Metrics - Ares Capital has a Forward P/E ratio of 10.15, which is higher than the industry average Forward P/E of 8.84 [6]. - The Financial - SBIC & Commercial Industry, to which Ares Capital belongs, has a Zacks Industry Rank of 148, placing it in the bottom 41% of over 250 industries [6].