Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.1 |
| P/S | 5.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.2 |
| PEG | 7.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 17.5x
- ▸PEG: 0.91
ARES · Why this verdict
Why Ares Management (ARES) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score5.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ares Management ranks among the fastest-growing firms in its industry with 28% revenue growth and converts earnings to free cash flow at 2.8 times net income, yet three earnings misses in the past four quarters, elevated leverage, and an unfavorable risk/reward at the current price argue for patience over adding exposure.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is growing at 28% year-over-year, placing the firm at the top of its industry peer group on a growth basis and validating the platform's ability to expand assets in the current environment. Peer rank | Revenue growth sustains above 15% year-over-year for two consecutive quarters. | →Stable |
| CounterThe growth score carries low confidence, suggesting the underlying revenue trend may be volatile; three earnings misses in the past four quarters indicate the firm may be having difficulty translating top-line growth into bottom-line outperformance against expectations. | ||
Three of the past four quarterly earnings reports came in below consensus estimates, including the two most recent consecutive periods, suggesting execution has consistently lagged expectations — a pattern that can pressure the multiple even when top-line growth is intact. Earnings | The company delivers a positive earnings surprise in the next two consecutive quarterly reports, ending the miss pattern. | →Stable |
| CounterThe one beat in the four-quarter set (a 4.7% positive surprise) demonstrates the ability to deliver upside, and the most recent miss of 6.6% is smaller than the prior quarter's 14% shortfall — suggesting the gap to consensus may be narrowing. | ||
A debt-to-equity ratio of 1.7 carries a quality penalty, and 16% of the float is sold short — a combination that amplifies downside volatility and leaves limited financial cushion if fee-earning asset growth stalls. Bear case | Debt-to-equity falls below 1.2 over the next 12 months or short interest drops below 10% of float. | ↑Improving |
| CounterFree cash flow converts at 282% relative to net income, meaning actual cash generation is far stronger than GAAP earnings suggest; that excess cash capacity can comfortably service the current debt load even if top-line growth decelerates. | ||
With only 2.7% headroom to the near-term resistance target of $137.67 and a risk/reward ratio of roughly 0.4-to-1 unfavorable, the current entry geometry offers asymmetry in the wrong direction even for investors who believe in the long-term growth story. Price targets | The stock retreats to a level that restores at least 1.5-to-1 favorable risk/reward before a new position is initiated. | →Stable |
| CounterMomentum has recovered to 6.6 with rising OBV and improving MACD — the stock may grind through resistance without offering a meaningful pullback, causing investors who wait for better geometry to miss a continuation move. | ||
Revenue is growing at 28% year-over-year, placing the firm at the top of its industry peer group on a growth basis and validating the platform's ability to expand assets in the current environment.
→StablePeer rank
- Expectation
- Revenue growth sustains above 15% year-over-year for two consecutive quarters.
CounterThe growth score carries low confidence, suggesting the underlying revenue trend may be volatile; three earnings misses in the past four quarters indicate the firm may be having difficulty translating top-line growth into bottom-line outperformance against expectations.
Three of the past four quarterly earnings reports came in below consensus estimates, including the two most recent consecutive periods, suggesting execution has consistently lagged expectations — a pattern that can pressure the multiple even when top-line growth is intact.
→StableEarnings
- Expectation
- The company delivers a positive earnings surprise in the next two consecutive quarterly reports, ending the miss pattern.
CounterThe one beat in the four-quarter set (a 4.7% positive surprise) demonstrates the ability to deliver upside, and the most recent miss of 6.6% is smaller than the prior quarter's 14% shortfall — suggesting the gap to consensus may be narrowing.
A debt-to-equity ratio of 1.7 carries a quality penalty, and 16% of the float is sold short — a combination that amplifies downside volatility and leaves limited financial cushion if fee-earning asset growth stalls.
↑ImprovingBear case
- Expectation
- Debt-to-equity falls below 1.2 over the next 12 months or short interest drops below 10% of float.
CounterFree cash flow converts at 282% relative to net income, meaning actual cash generation is far stronger than GAAP earnings suggest; that excess cash capacity can comfortably service the current debt load even if top-line growth decelerates.
With only 2.7% headroom to the near-term resistance target of $137.67 and a risk/reward ratio of roughly 0.4-to-1 unfavorable, the current entry geometry offers asymmetry in the wrong direction even for investors who believe in the long-term growth story.
→StablePrice targets
- Expectation
- The stock retreats to a level that restores at least 1.5-to-1 favorable risk/reward before a new position is initiated.
CounterMomentum has recovered to 6.6 with rising OBV and improving MACD — the stock may grind through resistance without offering a meaningful pullback, causing investors who wait for better geometry to miss a continuation move.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.0 |
| ROA | 3.1 |
| Gross margin | 10.0 |
| Op margin | 3.8 |
| Net margin | 6.1 |
| Current ratio | 2.5 |
| FCF quality | 10.0 |
| Moat | 6.2 |
| Rule of 40 | 8.3 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 339% FCF/NI
- ▸Rule of 40: 51 (pass)
- ▸Strong Piotroski F-Score: 7/9
Growth
4.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 3.3 |
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 4.5 |
| MA position | 6.0 |
| Volume | 4.1 |
- ▸Above 200-MA but MA slope flat
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.3 |
| Analyst rating | 7.5 |
| Price target | 7.3 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 3.9 |
| growth rank | 6.6 |
Technical
1.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 0.7 |
| 52w position | 4.2 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.7 |
| days to cover | 3.8 |
| volatility | 5.1 |
| put call | 6.5 |
| implied vol | 2.5 |
| max pain risk | 7.0 |
| beta | 4.8 |
| debt equity | 3.6 |
- ▸High IV: 65%
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.6 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings today
- ▸Dividend: 4.4%
How the verdict was assembled
Engine trigger
Earnings today. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (5)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.5<1.5@spot
- EARNINGS_PROXIMITY:0d<=7d
Warning (0)
none
Reward-to-Risk
0.47
Upside
+5.2%
Downside
10.9%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.55>1.3
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings today. Wait until post-earnings. The 10-dimension scores remain Insider at 7.3 (strongest), but ASYMMETRY:0.5<1.5@spot also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Insider at 7.3, Sentiment at 6.4, and Quality at 6.3; the weakest are Technical at 1.8, Peer rank at 3.5, and Growth at 4.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.47 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Industry Leading Revenue Growth
Trip ifRevenue growth falls below 10% YoY for 2 consecutive quarters.
- P2Three Of Four Quarters Missed
Trip ifEPS surprise turns positive (above 0%) for 2 consecutive quarters.
- P3Leverage Penalty And High Short Interest
Trip ifDebt-to-equity falls below 1.0 for 2 consecutive reporting periods.
- P4Unfavorable Asymmetry At Resistance
Trip ifReward-to-risk ratio rises above 1.5-to-1 as price retreats or analyst target is raised above $145.00.