Strong Q2 Earnings and GCP Deal Could Be a Game Changer for Ares Management (ARES)

• Ares Management Corporation recently reported second quarter 2025 earnings, with revenue of US$1.35 billion and net income of US$137.06 million, both higher than the previous year.
• The company's acquisition of GCP International has expanded its capabilities in real estate and digital infrastructure, supporting further growth in its Real Assets Group segment.
• We'll examine how Ares Management's strong earnings and portfolio expansion reinforce its long-term growth narrative and global ambitions.

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Ares Management Investment Narrative Recap

To be an Ares Management shareholder, you need confidence in the enduring demand for alternative investments and the firm's ability to expand fee-generating assets, especially as it deepens its real assets portfolio and broadens its client base globally. The latest earnings report, with revenue and net income both increasing year-over-year, strengthens the narrative around Ares’ growth catalysts, although the most critical risk, margin compression from industry competition and fee pressure, remains unchanged for now.

Among recent announcements, the affirmation of a US$1.12 per share quarterly dividend is most relevant, reinforcing the company's commitment to ongoing shareholder returns. This dividend stability, even as earnings per share from continuing operations saw only a modest uptick, provides a degree of near-term confidence, but does not alone counterbalance the primary risks associated with profitability.

However, investors should also be keenly aware that, despite these quarterly gains, the pressure from lower margins and stronger competitors could challenge...

Read the full narrative on Ares Management (it's free!)

Ares Management's outlook points to $6.3 billion in revenue and $2.1 billion in earnings by 2028. This assumes 14.0% annual revenue growth and a $1.74 billion increase in earnings from the current $355.5 million.

Uncover how Ares Management's forecasts yield a $189.54 fair value, in line with its current price.

Exploring Other Perspectives

Three members of the Simply Wall St Community set fair value estimates for Ares Management from US$25.23 to US$201.41 per share. While many see strength in asset expansion, others highlight the ongoing risk to margins as competition intensifies, inviting you to compare a broad spectrum of investor perspectives.

Explore 3 other fair value estimates on Ares Management - why the stock might be worth less than half the current price!

Build Your Own Ares Management Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Ares Management research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.
• Our free Ares Management research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ares Management's overall financial health at a glance.

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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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