Assessing Ares Management (ARES) Valuation After Launch Of Second European Direct Lending CLO

Simply Wall St.02-23

Ares Management (ARES) has priced its second European Direct Lending Collateralized Loan Obligation, Ares European Direct Lending CLO II, at over €300 million, drawing attention to the stock as ...

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See our latest analysis for Ares Management. The EDL CLO II launch lands at a time when Ares Management’s 1 day share price return of 5.15% and 30 day share price return of 21% sit against a 1 year total shareholder return decline of 27.3%, even though the 5 year total shareholder return is up about 2.8x. This suggests long term holders have still seen strong gains despite the recent pullback linked to weaker than expected quarterly results. If you are watching how credit focused asset managers react to shifting sentiment, this could be a good moment to broaden your watchlist with our 22 top founder-led companies. With Ares shares down about 27.3% over the past year but still up roughly 1.75x over five years, plus fresh products like EDL CLO II coming through, is this pullback a reset that creates opportunity, or is the market already pricing in potential future growth scenarios? AdvertisementMost Popular Narrative: 30.8% Undervalued With Ares Management last closing at $123.16 against a most followed fair value estimate of $177.94, the narrative is leaning toward meaningful upside based on its long term fee and asset base story.  The significant ramp in perpetual capital (now nearly 50% of fee-paying AUM), combined with consistent investment performance and low client redemptions, is expected to drive higher recurring fee revenues, greater profitability, and improved earnings visibility.  Read the complete narrative. Want to see what kind of revenue growth, margin lift, and future earnings power this narrative is baking in? The fair value hinges on a powerful mix of recurring fees, expanding platforms, and ambitious profitability targets. Curious how these moving parts are stitched together into that $177.94 figure? Result: Fair Value of $177.94 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this depends on Ares maintaining its fee levels and margins, while competition, regulatory pressure, and any setback in newer areas like data centers or sports media could challenge that outlook. Find out about the key risks to this Ares Management narrative. Another Way To Look At Valuation The fair value story built on long term earnings and fee growth looks supportive, but our DCF model paints a different picture. On those future cash flows, Ares screens as overvalued, with the current $123.16 price sitting above an estimated value of $89.83. Which lens do you trust more for sizing your risk? Look into how the SWS DCF model arrives at its fair value. ARES Discounted Cash Flow as at Feb 2026Next Steps If this mix of confidence and concern around Ares feels familiar, do not wait for consensus. Instead, check the underlying data yourself and weigh up the 3 key rewards and 3 important warning signs. Looking for more investment ideas? If Ares has your attention, do not stop there. The same tools can help you spot other opportunities that might fit your style even better.  Target potential mispricings by scanning our 54 high quality undervalued stocks that combine quality fundamentals with prices that may not fully reflect them. Prioritise resilience with our 87 resilient stocks with low risk scores if you want companies that score well on stability and risk controls. Hunt for fresh stories using our screener containing 23 high quality undiscovered gems before the crowd turns its focus to them.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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