Assessing Ares Management (ARES) Valuation After Recent Share Price Volatility

Ares Management (ARES) shares have delivered mixed results lately, with the stock climbing around 2% in the past day but dropping 6% over the week. Investors are weighing recent performance against the firm's strong multi-year growth.

See our latest analysis for Ares Management.

After a volatile stretch, Ares Management’s recent moves are playing out against a challenging year. While the share price climbed 2% yesterday, it remains nearly 19% lower year-to-date. Despite this dip, long-term total shareholder returns of over 100% in three years highlight the company’s enduring growth story even as near-term momentum has faded.

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With Ares Management’s share price well below earlier highs, but its long-term track record and analyst targets suggesting upside, investors are left weighing whether the current pricing already factors in future growth or if there is a genuine buying opportunity at hand.

Most Popular Narrative: 21.1% Undervalued

Compared to the last close at $145.17, the most followed narrative assigns a much higher fair value, suggesting the market may be missing Ares Management’s long-term growth potential.

Expansion into multiple asset classes (infrastructure, real estate, sports/media, secondaries), with recent successes like the GCP acquisition and the scaling of data center asset management, are expected to deliver higher management and development fees, supporting long-term revenue and FRE growth. Robust international fundraising, particularly in Europe and Asia-Pacific, and ongoing success in deepening distribution partnerships, are broadening Ares' addressable markets, increasing global deal flow, and positioning the company for sustained earnings growth.

Read the complete narrative.

What’s behind this bold valuation gap? The narrative hinges on a mix of recurring growth drivers, megatrends in private credit, and significant step-changes forecasted for both margins and earnings. These factors contribute to some ambitious projections that might surprise most investors.

Result: Fair Value of $183.94 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks like intensifying competition and margin pressure could quickly shift sentiment. These factors may challenge Ares Management’s growth-focused narrative despite recent optimism.

Find out about the key risks to this Ares Management narrative.

Another View: Valuation Versus Peers

Looking from a different angle, Ares Management is priced at 62.5 times earnings, significantly higher than the industry average of 23.7 and the peer average of 13.1. Even compared to its own fair ratio of 23.2, the stock appears expensive, raising questions about how much optimism is already priced in. Could this premium signal risk for new investors, or is it justified by future growth?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Ares Management Narrative

If you see things differently, or want to dig into the numbers yourself, you can quickly craft your own take on Ares Management’s story. Do it your way.

A great starting point for your Ares Management research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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