We've been asking ourselves recently if the market has placed a fair valuation on Ares Management. Let's dive into some of the fundamental values of this Large-Cap Finance company to determine if there might be an opportunity here for value-minded investors.
Ares Management's Valuation Is in Line With Its Sector Averages:
Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 15.92 and an average price to book (P/B) ratio of 1.78. In contrast, Ares Management has a trailing 12 month P/E ratio of 99.8 and a P/B ratio of 13.28.
Ares Management has moved 26.6% over the last year compared to 18.5% for the S&P 500 — a difference of 8.1%. Ares Management has a 52 week high of $200.49 and a 52 week low of $110.63.
Exceptional EPS Growth but Negative Cash Flows:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $1,765 | $1,764 | $2,289 | $2,880 | $3,236 | $3,691 |
| Interest Income (M) | $123 | $25 | $37 | $71 | $499 | $867 |
| Operating Margins | 24% | 22% | 47% | 18% | 41% | 35% |
| Net Margins | 8% | 9% | 18% | 6% | 15% | 11% |
| Net Income (M) | $149 | $152 | $409 | $168 | $474 | $391 |
| Depreciation & Amort. (M) | $39 | $41 | $113 | $134 | $126 | $32 |
| Diluted Shares (M) | 120 | 118 | 180 | 176 | 183 | 193 |
| Earnings Per Share | $0.25 | $0.87 | $2.15 | $0.87 | $2.42 | $2.03 |
| EPS Growth | n/a | 248.0% | 147.13% | -59.53% | 178.16% | -16.12% |
| Avg. Price | $23.12 | $35.1 | $60.89 | $69.12 | $118.92 | $175.5 |
| P/E Ratio | 92.48 | 40.34 | 28.32 | 79.45 | 49.14 | 139.29 |
| Free Cash Flow (M) | -$2,100 | -$426 | -$2,596 | -$734 | -$233 | $2,791 |
