Ares Management Corporation
Ares Management Corporation Fundamental Analysis
Ares Management Corporation (ARES) shows weak financial fundamentals with a PE ratio of 43.23, profit margin of 9.00%, and ROE of 12.01%. The company generates $8.7B in annual revenue with moderate year-over-year growth of 6.96%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 46.2/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ARES's fundamental strength across five key dimensions:
Efficiency Score
WeakARES struggles to generate sufficient returns from assets.
Valuation Score
ModerateARES shows balanced valuation metrics.
Growth Score
ModerateARES shows steady but slowing expansion.
Financial Health Score
ModerateARES shows balanced financial health with some risks.
Profitability Score
WeakARES struggles to sustain strong margins.
Key Financial Metrics
Is ARES Expensive or Cheap?
P/E Ratio
ARES trades at 43.23 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ARES's PEG of -1.74 indicates potential undervaluation.
Price to Book
The market values Ares Management Corporation at 5.33 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.36 times EBITDA. This is generally considered low.
How Well Does ARES Make Money?
Net Profit Margin
For every $100 in sales, Ares Management Corporation keeps $9.00 as profit after all expenses.
Operating Margin
Core operations generate 19.68 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.01 in profit for every $100 of shareholder equity.
ROA
Ares Management Corporation generates $1.82 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Ares Management Corporation generates strong operating cash flow of $2.40B, reflecting robust business health.
Free Cash Flow
Ares Management Corporation generates strong free cash flow of $2.29B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.98 in free cash annually.
FCF Yield
ARES converts 4.53% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
43.23
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.74
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.33
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.78
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.49
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.24
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How ARES Stacks Against Its Sector Peers
| Metric | ARES Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 43.23 | 19.02 | Worse (Expensive) |
| ROE | 12.01% | 821.00% | Weak |
| Net Margin | 9.00% | 2043.00% | Weak |
| Debt/Equity | 3.49 | 1.03 | Weak (High Leverage) |
| Current Ratio | 2.24 | 661.52 | Strong Liquidity |
| ROA | 1.82% | -23813.00% (disorted) | Weak |
ARES outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Ares Management Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
19.90%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
69.72%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
173.01%
Industry Style: Value, Dividend, Cyclical
High Growth