Stock Price & Analysis

Based on current analysis, ARCC stock is a hold due to stable performance and strong dividend yield. Consider monitoring for potential upside driven by positive news and insider buying activity.

Price Prediction for ARCC Stock in 2025

ARCC stock is expected to trade between $22 and $24 in 2025.

1. Current Price and Trends: ARCC closed at $22.45 on March 10, 2025, with a slight decline in pre-market trading. The stock has shown mixed trends recently, with a dividend yield of 8.21% attracting income-focused investors.

2. Analyst Targets: Wall Street analysts have set an average price target of $23.06, with a high of $24 and a low of $22. This suggests moderate upside potential.

3. Fundamental Strength: ARCC's strong dividend yield, stable earnings, and "Perfect 10" Smart Score make it a compelling choice for long-term investors.

4. Risks: The stock trades at a premium to its net assets, which could limit near-term gains if market conditions deteriorate.

Based on these factors, ARCC is expected to remain stable with a potential upside to $24 if market conditions improve.

The S1 support level for ARCC Stock is $21.87 ,The R1 resistant level for ARCC Stock is $23.4.

As of the end of day on 2025-03-12, the price of ARCC Stock was $22.

The target price for ARCC Stock according to analyst rating is 23.31, with the highest price target at 25.00 and the lowest at 22.00. Analysts have a Strong Buy rating on ARCC Stock overall.

The market cap of ARCC is $14.8B.

Analysis and Insights

Ares Capital Corp (ARCC) appears to be fairly valued based on current market conditions and financial metrics. Here's a concise analysis:

1. Valuation Metrics:

   • Price-to-Earnings (P/E): ARCC's P/E ratio is approximately 8.06 for Q4 2024, which is lower than the industry average, suggesting undervaluation.
   • EV/EBITDA: The EV/EBITDA ratio of 15.8 indicates reasonable valuation for a business development company (BDC).
   • Price-to-Book (P/B): At 1.07, the stock is trading near its book value, a positive sign for investors.

2. Dividend Yield:

   • ARCC offers a high dividend yield of 8.21%, making it attractive for income-focused investors. This yield is significantly higher than many peers, providing strong income potential.

3. Analyst Sentiment:

   • Most analysts rate ARCC as a "Buy," with price targets ranging from $23 to $25, indicating upside potential.

4. Insider Activity:

   • Recent insider purchases, such as Co-President James Miller buying 40,000 shares, signal management confidence in the company's prospects.

5. Market Trends:

   • BDCs like ARCC are sensitive to interest rates, but the stock's current price reflects a balanced risk-reward profile.

Conclusion

ARCC is not overvalued. Its attractive dividend yield, reasonable valuation metrics, and positive analyst sentiment make it a compelling investment opportunity.

Ares Capital Corporation is a specialty finance company focused on providing direct loans and other investments in private middle market companies in the United States. The Company invests primarily in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position), and second lien senior secured loans. In addition to senior secured loans, it also invests in subordinated debt, which in some cases includes an equity component, and preferred equity. It also may invest up to 30% of its portfolio in non-qualifying assets. Its investment activities are focused on industries, such as software and services, health care services, commercial and professional services, financial services, commercial and professional services, insurance Services, energy, food and beverage and others. Its investment adviser is Ares Capital Management LLC.

Price Prediction for ARCC Stock in 2030

Based on current trends and analysis, Ares Capital (ARCC) is expected to reach a price of $28 by 2030. This prediction is supported by its strong dividend yield of 8.21%, positive insider buying activity, and moderate analyst expectations.

ARCC has a total of 2800 employees.