Ares Capital Corporation (ARCC) is Attracting Investor Attention: Here is What You Should Know

Core Viewpoint - Ares Capital (ARCC) has shown a positive stock performance recently, with a +2% return over the past month, outperforming the S&P 500's -1.7% change and the Zacks Financial - SBIC & Commercial Industry's +1.2% gain, raising questions about its future direction [1] Earnings Estimate Revisions - The current quarter's earnings estimate for Ares Capital is projected at $0.59 per share, reflecting a +5.4% change from the previous year, with a +0.4% adjustment in the last 30 days [3] - For the current fiscal year, the consensus earnings estimate is $2.35, indicating a -0.8% change from the prior year, with a +0.9% change over the last month [3] - The next fiscal year's consensus estimate is $2.25, showing a -4.2% change from the previous year, with no change in the last month [3] Revenue Growth Forecast - Ares Capital's consensus sales estimate for the current quarter is $701.4 million, representing a +13.5% year-over-year change [5] - The sales estimates for the current and next fiscal years are $2.85 billion and $2.86 billion, indicating changes of +8.9% and +0.6%, respectively [5] Last Reported Results and Surprise History - In the last reported quarter, Ares Capital achieved revenues of $707 million, a +10.5% year-over-year increase, with an EPS of $0.63, unchanged from the previous year [6] - The reported revenues exceeded the Zacks Consensus Estimate of $684.52 million by +3.28%, and the EPS surpassed estimates by +6.78% [6] - Over the last four quarters, Ares Capital exceeded consensus EPS estimates three times and revenue estimates two times [7] Valuation - Ares Capital's valuation metrics, including price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), are essential for assessing whether the stock is fairly valued compared to its historical values and peers [8] - The Zacks Value Style Score for Ares Capital is graded D, indicating it is trading at a premium to its peers [9] Bottom Line - Ares Capital's Zacks Rank 3 suggests it may perform in line with the broader market in the near term, amidst ongoing market interest [10]