• If you are wondering whether Ares Management stock offers good value at today’s price, the key is understanding how its current market valuation stacks up against its fundamentals.
• Ares Management recently closed at US$129.34, with the share price down 4.1% over the last week, slightly higher over the past month with a 4.3% gain, and lower year to date and over 1 year, while still showing gains over 3 and 5 years.
• Recent coverage has focused on Ares Management’s position within alternative asset management and how investor sentiment around risk and return in this part of the market may be shifting. This context helps explain why the stock has been weaker in the short term while still carrying longer term gains.
• On Simply Wall St’s valuation checks, Ares Management currently scores 0 out of 6, as the stock is not flagged as undervalued on any of the six metrics in its valuation summary. The next sections will walk through the key valuation methods used and then finish with a broader way to think about what “fair value” really means for this stock.

Ares Management scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Ares Management Excess Returns Analysis

The Excess Returns model looks at how much profit Ares Management is expected to generate above the return that shareholders require, based on the company’s equity risk. It starts with the book value of the business and then adds the present value of those future “excess” earnings.

For Ares Management, the model uses a Book Value of $11.38 per share and a Stable EPS of $7.02 per share, sourced from weighted future Return on Equity estimates from 4 analysts. The implied Cost of Equity is $2.40 per share, so the Excess Return is $4.62 per share. That is supported by an Average Return on Equity of 27.17% and a Stable Book Value estimate of $25.82 per share, based on weighted future Book Value estimates from 2 analysts.

Putting these inputs together, the Excess Returns model arrives at an intrinsic value of $106.37 per share for Ares Management, compared with the recent share price of $129.34. This implies the stock trades about 21.6% above this estimate of fair value, which points to a full valuation on this measure.

Result: OVERVALUED

Our Excess Returns analysis suggests Ares Management may be overvalued by 21.6%. Discover 45 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Ares Management Price vs Earnings

For a profitable company like Ares Management, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It ties the share price directly to current earnings, which is usually the core driver of long term returns for established, profit making businesses.

What counts as a “normal” P/E depends on what investors expect from those earnings and how risky they believe they are. Higher expected growth or lower perceived risk can support a higher multiple, while lower growth expectations or higher risk can point to a lower one.

Ares Management currently trades on a P/E of 51.93x, compared with a Capital Markets industry average P/E of 40.55x and a peer group average of 18.98x. Simply Wall St’s Fair Ratio for the stock is 21.97x. The Fair Ratio is a proprietary estimate of what the P/E might look like after accounting for factors such as the company’s earnings growth profile, industry, profit margins, market capitalization and risk characteristics. This is often more informative than a simple comparison with peers or an industry average, which may not adjust for these differences. On this framework, Ares Management’s current P/E sits well above the Fair Ratio, which indicates the stock appears fully priced and potentially expensive on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Ares Management Narrative

Earlier it was mentioned that there is an even better way to think about valuation. Narratives on Simply Wall St let you attach a clear story to Ares Management, link that story to a specific forecast for revenue, earnings and margins, convert it into a Fair Value, and then continuously compare that Fair Value with the live share price on the Community page. Each investor can choose a view that sits closer to the more bullish assumptions implied by a Fair Value near US$175.66 or the more cautious assumptions behind a Fair Value around US$104.00, and have those Narratives automatically refresh as new earnings, news or sector data come through.

For Ares Management however we will make it really easy for you with previews of two leading Ares Management Narratives:

Fair value in this bullish narrative is US$145.24 per share.

At the recent price of US$129.34, this implies Ares Management trades about 11% below this fair value estimate.

Analysts behind this view are using an annual revenue growth rate of about 5.16%.

• Focuses on Ares Management using diversification across asset classes and regions, and a larger share of perpetual capital, to support recurring fee revenues and earnings visibility.
• Assumes revenue growth, expanding profit margins, and higher future earnings, with debate among analysts about how strong those earnings could be by 2029.
• Highlights fee pressure, competition in private credit, regulatory changes, and execution risks in newer business lines as key threats to this more optimistic path.

Fair value in this more cautious narrative is US$104.00 per share.

At the recent price of US$129.34, this implies Ares Management trades about 24% above this fair value estimate.

The bearish cohort here is working with an annual revenue growth rate of about 6.58%.

• Emphasizes rising general and administrative costs, integration costs from the GCP International platform, and competition in private credit as potential pressures on margins and earnings quality.
• Frames interest rate uncertainty, fundraising assumptions, and sentiment around private credit as possible constraints on how quickly fee earning assets under management and revenues grow.
• Recognizes that Ares Management still has significant dry powder, global reach, and diversified fundraising, but questions whether the current share price already reflects these positives under more conservative assumptions.

If you want to see how other investors weigh these bullish and bearish storylines against the current share price, you can review the full range of community views and valuation models in one place, starting with the See what the community is saying about Ares Management.

Do you think there's more to the story for Ares Management? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.