Key Stats for Ares Management Stock
- Current Price: $142.53
- Target Price (Mid): ~$262
- Street Target: ~$148
- Potential Total Return: ~84%
- Annualized IRR: ~15% / year
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What Happened?
Ares Management (ARES) has split the market in two. Across 18 analysts covering the stock, there are seven Buy ratings, four Outperforms, seven Holds, and not one Sell. At the same time, short sellers have roughly doubled their position against it over the past year. One camp won’t bet against the stock at all; the other is pressing harder. That disagreement is what actually defines Ares right now.
After a drawdown that bottomed at 47.76% on March 12, Ares has clawed back to $142.53, still about 24% below its 52-week high of $186.85 and roughly flat with the Street’s average target of $148.
The Bet the Shorts Are Making
Short interest in Ares has climbed to about 8.5% of its float, well above the level of a year ago and higher than most of its asset-management peers, based on exchange-reported data compiled by StockTitan. For a large, dividend-paying financial with zero sell ratings, that is an unusually crowded short.
Ares trades near 22 times next-twelve-month earnings and close to 20 times NTM EV/EBITDA, well above the roughly 11 times forward earnings the legacy asset managers command. Bears argue that it is a lot to pay for a firm still viewed as ground zero for private-credit risk, and that any crack in the credit book resets the multiple fast. The shorts are not betting the business is bad.
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Why No Analyst Will Blink
The reason the sell-side won’t capitulate is that the reported business keeps outrunning the fear. In the second quarter, fee-related earnings rose 20% year over year to roughly $491 million, management fees topped $1 billion, and the firm raised a record $36 billion of gross capital in a single quarter, its largest haul ever. Assets under management and fee-paying AUM both grew 17%. When Ares reported on July 31, the stock jumped 8.18% in the following session as at least six banks lifted their price targets.
In the firm’s nontraded business development company, nonaccruals sit near 0.5% with portfolio-company EBITDA growing 13%. Across the broader U.S. direct lending book, nonaccruals remain below 2%. CEO Michael Arougheti argued the redemption scare that drove the stock down earlier this year is already reversing, noting the Asia-concentrated redemption queue in that BDC has been “cut in half over the last 2 quarters, about $1.2 billion to a little over $600 million.”
Ares yields about 4.1% and just raised its quarterly payout to $1.35, a more than 20% increase over the year-ago quarter. Shorting a stock means paying that growing dividend to the lender of the shares, which makes an 8.5% short position an expensive conviction to hold.
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TIKR Advanced Model Analysis
- Current Price: $142.53
- Target Price (Mid): ~$262
- Potential Total Return: ~84%
- Annualized IRR: ~15% / year
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Using the TIKR mid-case scenario, realized at year-end 2030, the model points to a target near $262, an approximately 84% total return, or roughly 15% annualized. That case sides with the analysts over the shorts, and it rests on two revenue drivers:
- The fee backlog: about $114 billion of AUM already committed but not yet paying fees, which management estimates could add around $828 million in annual management fees as it deploys.
- Fundraising breadth: roughly 70% of this year’s capital raised outside the four largest credit fund families, reducing reliance on any single strategy.
The margin driver is operating leverage, with a year-to-date fee-related earnings margin above 42% that management expects to push toward the top of its guidance. The primary risk is the one the shorts are pressing: a genuine turn in the private credit cycle that lifts nonaccruals from today’s low levels and stalls both deployment and performance fees.
On the upside, a re-acceleration in U.S. direct lending, where management flagged signed NDAs up about 35% quarter over quarter, would push realized income above the mid-case. On the downside, deteriorating credit would compress the multiple and pull the stock toward the Street’s more conservative $148, exactly the outcome the short interest is positioned for.
Conclusion
The tie-breaker is credit quality, and it reports on a schedule. Watch nonaccruals on the third-quarter print, expected in early November: holding near current sub-2% levels while fee-related earnings grow around 20% would confirm the analysts and leave the shorts paying a 4% dividend to wait. A move up in nonaccruals, even a modest one, is the first thing that would prove the short sellers right. Until that number turns, the crowded short is a bet against a business that keeps delivering.
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Should You Invest in Ares Management?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Ares Management, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
