Ares Management Corp (ARES) Stock Analysis
Ares Management Corp (ARES) Stock Analysis
Analysis from 10-Q filed 2025-11-06. Data as of Q4 2025.
Overall Grade: F (Concerning)
Ares Management Corp faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | N/A | Below expectations |
| FCF Margin | 68.7% | Strong cash generation |
| Debt/Equity | 0.0x | Conservative leverage |
Investment Thesis: Healthy free cash flow margin of 68.7% provides financial flexibility for growth and shareholder returns.
Explore Ares Management Corp: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Ares Management Corp earns N/A ROIC
Ares Management Corp's trailing-twelve-month ROIC of N/A (sector median: 7.3%). Source: 10-Q filed 2025-11-06.
| Metric | ARES | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | N/A | Red flag | Below sector median of 7.3% |
| Return on Equity (ROE) | 9.9% | Adequate | Moderate equity returns |
Cash Flow: Ares Management Corp generates $3.3B FCF at 68.7% margin, positive NaN/8 quarters
Ares Management Corp generated $3.3B in free cash flow (TTM), a 68.7% FCF margin, a margin that ranks Top 5% in Financials. Operating cash flow exceeds net income by 7.7x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-06.
| Metric | ARES | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 68.7% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $3.3B | Good | Positive cash generation |
| OCF/Net Income | 7.7x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Ares Management Corp at 0.0x leverage
Ares Management Corp's debt-to-equity ratio of 0.0x reflects conservative leverage. Source: 10-Q filed 2025-11-06.
| Metric | ARES | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.0x | Excellent | Conservative capital structure |
Valuation: Ares Management Corp trades at 40.5x earnings
Ares Management Corp trades at a P/E of 40.5x. Free cash flow yield of 18.9% offers attractive cash returns relative to price.
| Metric | ARES | Rating | Context |
|---|---|---|---|
| P/E Ratio | 40.5x | Adequate | Premium valuation |
| EV/Sales | 3.5x | Good | Growth premium priced in |
| FCF Yield | 18.9% | Excellent | Attractive cash return |
| Dividend Yield | 2.8% | Adequate | Growth focus over income |
Capital Allocation: Ares Management Corp returns 2.8% shareholder yield
Ares Management Corp's total shareholder yield is 2.8% (dividends 2.8% + buybacks). Source: 10-Q filed 2025-11-06.
| Metric | ARES | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 2.8% | Adequate | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $84.6M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Free Cash Flow Margin | 68.7% | Top 5% | 3.2x above |
| Return on Equity (ROE) | 9.9% | Bottom 50% | 0.9x below |
| P/E Ratio | 40.5x | N/A | - |
Financial Scorecard
| Metric | ARES | Rating | Sector Context |
|---|---|---|---|
| Free Cash Flow Margin | 68.7% | Excellent | Top 5% of sector (median: 21.7%) |
| Debt to Equity Ratio | 0.0% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 40.5x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 18.9% | Excellent | High cash return |
Frequently Asked Questions
Q: What is Ares Management Corp's Return on Invested Capital (ROIC)?
Ares Management Corp (ARES) has a trailing twelve-month Return on Invested Capital (ROIC) of N/A. This compares below the sector median of 7.3%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Ares Management Corp's Free Cash Flow Margin?
Ares Management Corp (ARES) has a free cash flow margin of 68.7%, generating $3.3 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Ares Management Corp stock overvalued or undervalued?
Ares Management Corp (ARES) trades at a P/E ratio of 40.5x, which is above the sector median of N/A. The EV/Sales multiple is 3.5x. Free cash flow yield is 18.9%, which represents an attractive cash return to investors.
Q: Does Ares Management Corp pay a dividend?
Ares Management Corp (ARES) currently pays a dividend yield of 2.8%. Including share buybacks, the total shareholder yield is 2.8%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is Ares Management Corp's revenue and earnings growth?
Ares Management Corp (ARES) grew revenue by 28.9% year-over-year. Earnings per share increased by 181.7% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does Ares Management Corp compare to competitors in Financials?
Compared to other companies in Financials, Ares Management Corp (ARES) shows: ROIC of N/A is below the sector median of 7.3% (NaNx median). FCF margin of 68.7% exceeds the sector median of 21.7% (Top 0% of sector). These rankings are based on MetricDuck's analysis of all Financials companies with available SEC filings.
Q: What warning signs should I watch for with Ares Management Corp?
Ares Management Corp (ARES) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-11-06. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.