Value
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.3 |
| P/S | 5.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.7 |
| PEG | 6.8 |
| Analyst target | 6.0 |
- ▸Forward P/E: 16.0x
- ▸PEG: 1.05
ARES · Why this verdict
Why Ares Management (ARES) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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.
→StableBear 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.
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.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.7 |
| ROA | 1.7 |
| Gross margin | 3.5 |
| Op margin | 7.4 |
| Net margin | 5.3 |
| Current ratio | 2.0 |
| FCF quality | 10.0 |
| Moat | 6.1 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 282% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
9.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 9.6 |
- ▸Strong growth: 28% YoY
Momentum
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.5%/30d — confirmed downtrend
Sentiment
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 7.4 |
| Price target | 8.1 |
- ▸LLM news sentiment: +0.60 (n=2)
- ▸Analyst upside: 24%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 4.4 |
| growth rank | 9.0 |
- ▸Industry growth leader
Technical
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.7 |
| support resistance | 6.8 |
| 52w position | 2.4 |
| gap | 5.0 |
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.4 |
| days to cover | 2.4 |
| volatility | 0.0 |
| put call | 7.6 |
| implied vol | 3.2 |
| beta | 4.9 |
| debt equity | 3.6 |
| news risk | 5.5 |
- ▸High short interest: 17%
- ▸High IV: 61%
Catalyst
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 5.2 |
| news activity | 6.0 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend: 462.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.1<4.5
- ASYMMETRY:1.2<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.17
Upside
+12.0%
Downside
10.2%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 33, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.54>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 9.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.1<4.5, ASYMMETRY:1.2<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 1.17 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 9.6, Sentiment at 7.8, and Quality at 5.4; the weakest are Momentum at 3.1, Catalyst at 3.5, and Risk (lower is worse) at 3.6. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.17 and an engine sizing output of AVOID.
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.