The Analyst Verdict: Ares Capital In The Eyes Of 6 Experts

During the last three months, 6 analysts shared their evaluations of Ares Capital (NASDAQ:ARCC), revealing diverse outlooks from bullish to bearish.

In the table below, you'll find a summary of their recent ratings, revealing the shifting sentiments over the past 30 days and comparing them to the previous months.

The 12-month price targets, analyzed by analysts, offer insights with an average target of $22.08, a high estimate of $23.00, and a low estimate of $21.00. A negative shift in sentiment is evident as analysts have decreased the average price target by 2.95%.

Investigating Analyst Ratings: An Elaborate Study

A clear picture of Ares Capital's perception among financial experts is painted with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: Analysts frequently update their recommendations based on evolving market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to Ares Capital. This information provides a snapshot of how analysts perceive the current state of the company.
• Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of Ares Capital compared to the broader market.
• Price Targets: Analysts explore the dynamics of price targets, providing estimates for the future value of Ares Capital's stock. This examination reveals shifts in analysts' expectations over time.

Analyzing these analyst evaluations alongside relevant financial metrics can provide a comprehensive view of Ares Capital's market position. Stay informed and make data-driven decisions with the assistance of our Ratings Table.

Stay up to date on Ares Capital analyst ratings.

Unveiling the Story Behind Ares Capital

Ares Capital Corp is a United States-based closed-ended specialty finance company. Its investment objective is to generate both current income and capital appreciation through debt and equity investments. The company focuses on investing primarily in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) and second lien senior secured loans. In addition to senior secured loans, the company also invests in subordinated loans and preferred equity, it also makes common equity investments.

Key Indicators: Ares Capital's Financial Health

Market Capitalization Analysis: The company's market capitalization is below the industry average, suggesting that it is relatively smaller compared to peers. This could be due to various factors, including perceived growth potential or operational scale.

Revenue Growth: Ares Capital's revenue growth over a period of 3M has faced challenges. As of 31 March, 2025, the company experienced a revenue decline of approximately -44.65%. This indicates a decrease in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Financials sector.

Net Margin: Ares Capital's net margin excels beyond industry benchmarks, reaching 87.96%. This signifies efficient cost management and strong financial health.

Return on Equity (ROE): Ares Capital's ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of 1.78%, the company may face hurdles in generating optimal returns for shareholders.

Return on Assets (ROA): Ares Capital's ROA is below industry standards, pointing towards difficulties in efficiently utilizing assets. With an ROA of 0.85%, the company may encounter challenges in delivering satisfactory returns from its assets.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 1.02.

The Basics of Analyst Ratings

Analysts work in banking and financial systems and typically specialize in reporting for stocks or defined sectors. Analysts may attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish "analyst ratings" for stocks. Analysts typically rate each stock once per quarter.

Some analysts will also offer forecasts for metrics like growth estimates, earnings, and revenue to provide further guidance on stocks. Investors who use analyst ratings should note that this specialized advice comes from humans and may be subject to error.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.