Investment Thesis
Ares Management demonstrates solid fundamental health with strong profitability metrics (27.1% operating margin, 11.1% net margin) and exceptional cash generation (68.3% FCF margin, $3.2B free cash flow). The company exhibits conservative leverage (0.05x debt-to-equity) and robust interest coverage (16.8x), providing financial stability despite revenue headwinds.
ARES-PB Strengths
- Exceptional free cash flow generation with 68.3% FCF margin indicating highly efficient capital conversion
- Strong profitability with 27.1% operating margin and 11.1% net margin demonstrating pricing power
- Conservative capital structure with minimal leverage (0.05x debt-to-equity) and fortress balance sheet
- Robust net income growth of 23.8% YoY despite 15.1% revenue decline, indicating operational efficiency gains
- Strong interest coverage ratio of 16.8x provides significant debt service capacity
ARES-PB Risks
- Significant revenue decline of 15.1% YoY raises concerns about business momentum and market demand
- Low ROA of 1.8% despite substantial $28.6B asset base suggests inefficient asset deployment
- Modest ROE of 12.3% indicates below-average equity returns relative to asset-heavy business model
- Insider activity of 12 Form 4 filings in 90 days warrants monitoring for potential signal concerns
- Business highly dependent on asset management performance which is cyclical and market-sensitive
Key Metrics to Watch
- Quarterly revenue trend to assess stabilization vs. continued decline
- Assets under management (AUM) growth and net inflows as leading indicators
- Operating margin sustainability amid potential operating leverage compression
- Free cash flow consistency and capital allocation decisions
- Return on equity trajectory and management's capital deployment efficiency
ARES-PB Financial Metrics
ARES-PB Profitability Ratios
ARES-PB Balance Sheet & Liquidity
ARES-PB 5-Year Financial Trend
5-Year Trend Summary: Ares Management Corp's revenue has grown significantly by 33% over the 5-year period, indicating strong business expansion.
ARES-PB Growth Metrics (YoY)
ARES-PB Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.1B | $118.5M | N/A |
| Q2 2025 | $788.7M | $94.9M | N/A |
| Q1 2025 | $707.4M | $47.2M | N/A |
| Q3 2024 | $671.3M | N/A | N/A |
| Q2 2024 | $788.7M | N/A | N/A |
| Q1 2024 | $707.4M | N/A | N/A |
| Q3 2023 | $671.3M | N/A | N/A |
| Q2 2023 | $601.4M | N/A | N/A |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ARES-PB Capital Allocation
ARES-PB SEC Filings
Access official SEC EDGAR filings for Ares Management Corp (CIK: 0001176948)