ARES Should I Buy
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Ares Management Corp (ARES) is not a strong buy for a beginner investor with a long-term strategy at this time. While the company has shown revenue growth, its significant drop in net income and EPS, coupled with liquidity concerns and negative sentiment in the private credit sector, suggest caution. The technical indicators and options data do not present a compelling entry point, and analysts have broadly lowered price targets, reflecting uncertainty in the asset manager space.
The MACD is positive and expanding, indicating a bullish momentum. However, the RSI is neutral at 55.147, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level (104.925), with resistance at 110.342 and support at 99.508. Overall, the technical indicators suggest mixed signals, with no strong bullish trend.
Revenue increased by 27.68% YoY in Q4 2025, showcasing growth in top-line performance. Analysts like Deutsche Bank and RBC Capital see potential in Ares' long-term fundamentals and durable fee-related earnings growth.
Net income dropped by 87.59% YoY, and EPS fell by 88.89%, reflecting significant profitability challenges. Liquidity concerns are evident, with capped withdrawals from the Ares Strategic Income Fund and $1.2 billion in redemption requests. Analysts have broadly lowered price targets, citing issues in private credit markets, AI-driven disruption, and market volatility.
In Q4 2025, revenue increased by 27.68% YoY to $1.77 billion. However, net income dropped sharply by 87.59% YoY to $18.18 million, and EPS fell by 88.89% to $0.08. This indicates significant profitability challenges despite revenue growth.
Analyst sentiment is mixed to negative. Multiple firms have lowered price targets, citing concerns about private credit fundamentals, AI disruption, and market volatility. However, some analysts, like Deutsche Bank, see the selloff as overblown and believe the company's fee-related earnings growth remains intact.
