Is Ares Management LP (ARES) overvalued?
On Equity Rank's model estimate, ARES trades 432% above its fair value. Ares Management LP (ARES) last closed at $133.98; the multi-method model fair value is $25.17.
| Price | Model fair value | Price vs model |
|---|---|---|
| $133.98 | $25.17 | 432% above |
What the answer rests on
- 1 of 7 valuation methods put ARES's value above its price and 6 put it below, so the methods mostly agree.
- To justify today's price, ARES's free cash flow would need to grow about 5.7% a year for ten years (a reverse discounted cash flow).
- ARES trades at 112.2 times its last year's earnings, against a median of 13.3 for 97 profitable Asset Management companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 31% above to 448% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ARES's fair value · What prices assume · Other companies