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Ares Management (ARES)
NYSE:ARES
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Ares Management
(NYSE:ARES)66Neutral
Positive Factors
Fundraising
Fundraising was robust in the period, totaling a record $28B, bringing the full-year total to $93B.
Strategic Growth
The expanded leadership team at Ares is expected to allow the firm to lean in further on strategic growth priorities and operational initiatives.
Negative Factors
Earnings
4Q24 earnings, including $1.225 of EPS, below the estimate of and consensus of $1.30.
Margin Concerns
ARES shares underperformed on a soft 3Q and ongoing concerns about margins and wealth distribution costs.
Ares Management (ARES) vs. S&P 500 (SPY)
Market Cap
$51.10B
Dividend Yield2.19%
Average Volume (3M)1.30M
Price to Earnings (P/E)77.7
Beta (1Y)1.34
Revenue Growth6.12%
EPS Growth-15.84%
CountryUS
Employees2,850
SectorFinancial
Sector Strength93
IndustryAsset Management Services
Share Statistics
EPS (TTM)2.02
Shares Outstanding204,107,270
10 Day Avg. Volume1,708,767
30 Day Avg. Volume1,300,254
Financial Highlights & Ratios
PEG Ratio85.95
Price to Book (P/B)N/A
Price to Sales (P/S)13.78
Price to Cash Flow (P/CF)16.60
P/FCF Ratio16.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$200.00Price Target Upside24.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Ares Management Business Overview & Revenue Model
Company DescriptionAres Management Corp. is engaged in providing investment management and consultancy services. It operates through the following segments: Credit Group, Private Equity Group and Real Estate Group. The Credit Group segment offers credit strategies across the liquid and illiquid spectrum, including syndicated bank loans, high yield bonds, credit opportunities, special situations, asset-backed investments and U.S. and European direct lending. The Credit Group provides solutions for traditional fixed income investors seeking to access the syndicated bank loan and high yield bond markets and capitalize on opportunities across traded corporate credit. It additionally provides investors access to directly originated fixed and floating rate credit assets and the ability to capitalize on illiquidity premiums across the credit spectrum. The Private Equity Group segment manages shared control investments in corporate private equity funds. The Real Estate Group segment provides debt, mortgage loans, and equity capital to borrowers, property owners, and real estate developers. The company was by founded by Michael J. Arougheti, David B. Kaplan, John H. Kissick, Antony P. Ressler, and Bennett Rosenthal on November 15, 2013 and is headquartered in Los Angeles, CA.
How the Company Makes MoneyAres Management makes money primarily through management fees and performance fees. Management fees are charged based on the assets under management (AUM) and are collected regardless of the investment performance. These fees provide a steady revenue stream as long as the assets remain under management. Performance fees, also known as incentive fees, are earned when the investments achieve certain performance benchmarks or return thresholds, aligning the company's interests with those of its investors. Additionally, Ares may generate income from its own investments in the funds and accounts it manages. The company also forms strategic partnerships and joint ventures, which can enhance its investment capabilities and expand its revenue base.
Ares Management Financial Statement Overview
Summary
Ares Management demonstrates strong revenue growth and profitability, with improved margins indicating efficient operations. The balance sheet shows reduced leverage, enhancing financial stability, while cash flow issues have improved but require monitoring.Income Statement
Ares Management has demonstrated strong revenue growth and improving profitability over recent years. With a significant increase in net income and consistent revenue growth, the company's gross and net profit margins have improved, indicating efficient operations and cost management. However, the EBIT margin has shown some fluctuations, which could indicate potential operational challenges or increased competition in the industry.78
Positive
Balance Sheet
The balance sheet shows a robust improvement in equity, with a significant increase in stockholders' equity over the past year. The debt-to-equity ratio has improved drastically, indicating reduced leverage and better financial stability. However, the equity ratio is still relatively low, suggesting that a significant portion of the company's assets is financed by debt, which could pose risks if market conditions change.65
Positive
Cash Flow
The cash flow statement indicates a strong turnaround in free cash flow, reflecting improved cash generation capabilities. The operating cash flow to net income ratio is positive, demonstrating effective conversion of earnings into cash. However, previous periods showed negative operating and free cash flows, which highlight past liquidity challenges that seem to be improving but still require careful monitoring.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.88B | 3.63B | 3.06B | 4.21B | 1.76B | Gross Profit |
| 2.15B | 2.15B | 1.24B | 1.38B | 592.68M | EBIT |
| 814.96M | 885.80M | 694.21M | 868.90M | 313.56M | EBITDA |
| 2.41B | 1.15B | 1.04B | 982.19M | 354.81M | Net Income Common Stockholders |
| 463.74M | 474.33M | 153.44M | 368.62M | 119.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.51B | 1.50B | 1.11B | 1.39B | 1.06B | Total Assets |
| 24.88B | 24.73B | 22.00B | 21.61B | 15.17B | Total Debt |
| 641.86M | 15.76B | 13.33B | 12.49B | 10.90B | Net Debt |
| -866.11M | 14.26B | 12.22B | 11.10B | 9.84B | Total Liabilities |
| 18.06B | 19.71B | 18.20B | 17.79B | 12.70B | Stockholders Equity |
| 3.54B | 1.89B | 1.59B | 1.83B | 1.19B |
| Cash Flow | Free Cash Flow | |||
| 2.70B | -300.44M | -769.91M | -2.62B | -441.60M | Operating Cash Flow |
| 2.79B | -233.26M | -734.11M | -2.60B | -425.66M | Investing Cash Flow |
| -159.40M | -111.08M | -337.38M | -1.08B | -136.76M | Financing Cash Flow |
| -1.43B | 292.13M | 1.13B | 3.50B | 943.89M |
Ares Management Technical Analysis
Negative
160.99
Price Trends
182.79
Negative
176.30
Negative
159.21
Positive
Market Momentum
-5.74
Positive
28.45
Positive
23.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARES, the sentiment is Negative. The current price of 160.99 is below the 20-day moving average (MA) of 179.95, below the 50-day MA of 182.79, and above the 200-day MA of 159.21, indicating a neutral trend. The MACD of -5.74 indicates Positive momentum. The RSI at 28.45 is Positive, neither overbought nor oversold. The STOCH value of 23.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARES.
Ares Management Risk Analysis
Ares Management disclosed 89 risk factors in its most recent earnings report. Ares Management reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ares Management Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $78.68B | 19.24 | 26.53% | 1.28% | -20.40% | -13.30% | |
70 Outperform | $22.29B | 10.93 | 19.76% | 4.77% | 9.80% | 17.87% | |
68 Neutral | $16.28B | 16.25 | 16.08% | 2.90% | 62.87% | ― | |
67 Neutral | $107.28B | 36.86 | 13.01% | 0.53% | 42.19% | -18.20% | |
66 Neutral | $51.10B | 77.73 | 13.09% | 2.19% | 6.12% | -15.84% | |
65 Neutral | $193.19B | 43.77 | 33.81% | 2.49% | 21.25% | 97.42% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
ARES
Ares Management
160.99
28.66
21.66%
APO
Apollo Global Management
137.92
30.62
28.54%
KKR
KKR & Co
120.78
24.34
25.24%
TROW
T Rowe Price
100.10
-11.92
-10.64%
BX
Blackstone Group
150.73
30.62
25.49%
CG
Carlyle Group
45.06
-0.22
-0.49%
Ares Management Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -17.59% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a strong year for Ares Management with record fundraising and deployment, significant growth in management fees and FRE, and strategic expansions in the executive team. Despite challenges such as increased G&A expenses and a cautious outlook on the real estate market, the company remains optimistic about 2025 with substantial dry powder and strong positioning in private credit and real estate.Highlights
Record-Breaking Fundraising and Deployment
Ares Management set a full-year fundraising record of $92.7 billion in 2024, exceeding the previous annual record by more than $15 billion. The company also achieved record deployment of $106.7 billion, up over 50% from 2023.
Significant Growth in Management Fees and FRE
Management fees and fee-related earnings (FRE) increased by 15% and 17% respectively, driven by growth in fee-paying AUM. Fourth quarter management fees reached a record $781 million.
Expansion of Executive Management Team
Kip DeVeer and Blair Jacobs were promoted to co-presidents, enhancing the executive management team to support critical strategic and operational initiatives.
Strong Performance in Private Credit and Real Estate
Fourth quarter investment activity increased by 34% year-over-year, with significant increases in US private credit, real estate debt and equity, and secondary solutions.
Significant Dry Powder for Future Investments
Ares Management enters 2025 with a record $133 billion of dry powder, positioning the firm for a strong year in a potentially more active market.
Lowlights
Increase in G&A Expenses
General and administrative expenses rose by more than 20% in 2024, driven by supplemental distribution fees and occupancy costs from new office leases.
Challenges in Real Estate Market
While there were signs of recovery, the real estate market still faces challenges, with fee-related performance revenues not estimated from the real estate group in 2025.
Company Guidance
During Ares Management Corporation's Fourth Quarter and Year End 2024 earnings call, key guidance highlights included a number of remarkable financial metrics and strategic initiatives. The company declared a 20% increase in its quarterly dividends to $1.12 per share, reflecting strong financial performance. Ares celebrated record levels in assets under management (AUM), fee-paying AUM, and annual fundraising, with the latter reaching $92.7 billion, a $15 billion increase from the previous record. Moreover, the company deployed a record $106.7 billion in investments, a significant 50% increase from 2023, driven by robust activity in US private credit and real estate sectors. Ares anticipates continued growth, buoyed by a robust pipeline and favorable market conditions. The firm's strategic initiatives include the appointment of Kip DeVeer and Blair Jacobs as co-presidents to bolster leadership and drive strategic initiatives. Additionally, the pending acquisition of GCP International is expected to enhance investment capabilities, particularly in real assets. With a record $133 billion in dry powder and significant fundraising momentum, Ares is well-positioned for a promising 2025.Ares Management Corporate Events
M&A TransactionsBusiness Operations and Strategy
Ares Management Completes Acquisition of GLP Capital Partners
Positive
Mar 3, 2025
On March 3, 2025, Ares Management Corporation announced the completion of its acquisition of the international business of GLP Capital Partners Limited, excluding operations in Greater China. This acquisition enhances Ares’ global real assets platform, now managing over $115 billion, and strengthens its presence in Asia, Europe, and the U.S. The transaction positions Ares as a top global owner of logistics assets and expands its capabilities in digital infrastructure and self-storage sectors. The acquisition is expected to drive growth in logistics, digital infrastructure, and clean energy assets, leveraging Ares’ local investment approach and vertically integrated capabilities.
DividendsFinancial Disclosures
Ares Management Reports Strong 2024 Financial Results
Positive
Feb 5, 2025
On February 5, 2025, Ares Management Corporation announced a quarterly dividend of $1.12 per share for its Class A common stock, payable on March 31, 2025. The company also reported its financial results for the fourth quarter and full year ending December 31, 2024, highlighting a GAAP net income of $177.3 million and significant achievements in fundraising and capital deployment, with $93 billion raised in 2024. The company is optimistic about a more active transaction environment in 2025, which could offer more investment opportunities and drive growth. Ares also declared a quarterly dividend of $0.84375 per share for its Series B preferred stock, payable on April 1, 2025, and noted progress on its GCP International transaction, expected to close in the first quarter of 2025.
Executive/Board ChangesBusiness Operations and Strategy
Ares Management Announces New Co-Presidents
Positive
Feb 5, 2025
On February 5, 2025, Ares Management Corporation announced the appointment of Kipp deVeer and Blair Jacobson as Co-Presidents of the company, succeeding Michael Arougheti who continues as CEO. This leadership change is aimed at driving strategic initiatives and supporting investor relationships, highlighting Ares’ commitment to senior talent development and maintaining its competitive edge in the global alternative investment industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.