As of May 23, 2025, Ares Management Corp's estimated intrinsic value ranges from $13.44 to $231.19 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $116.52 | -27.1% |
| Discounted Cash Flow (5Y) | $84.80 | -47.0% |
| Dividend Discount Model (Multi-Stage) | $231.19 | +44.6% |
| Dividend Discount Model (Stable) | $62.16 | -61.1% |
| Earnings Power Value | $13.44 | -91.6% |
Is Ares Management Corp (ARES) undervalued or overvalued?
With the current market price at $159.88, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Ares Management Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.64 | 0.8 |
| Cost of equity | 6.8% | 9.4% |
| Cost of debt | 4.0% | 15.6% |
| Tax rate | 13.5% | 13.9% |
| Debt/Equity ratio | 0.34 | 0.34 |
| After-tax WACC | 5.9% | 10.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $85 | $29,097M | 88.6% |
| 10-Year Growth | $117 | $35,915M | 74.0% |
| 5-Year EBITDA | $64 | $24,642M | 86.6% |
| 10-Year EBITDA | $95 | $31,304M | 70.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,042M |
| Discount Rate (WACC) | 10.4% - 5.9% |
| Enterprise Value | $10,005M - $17,510M |
| Net Debt | $10,867M |
| Equity Value | $(862)M - $6,643M |
| Outstanding Shares | 215M |
| Fair Value | $(4) - $31 |
| Selected Fair Value | $13.44 |
| Metric | Value |
|---|---|
| Market Capitalization | $34370M |
| Enterprise Value | $45237M |
| Trailing P/E | 78.49 |
| Forward P/E | 26.63 |
| Trailing EV/EBITDA | 15.80 |
| Current Dividend Yield | 392.57% |
| Dividend Growth Rate (5Y) | 29.34% |
| Debt-to-Equity Ratio | 0.34 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $34.95 |
| Discounted Cash Flow (5Y) | 25% | $21.20 |
| Dividend Discount Model (Multi-Stage) | 20% | $46.24 |
| Dividend Discount Model (Stable) | 15% | $9.32 |
| Earnings Power Value | 10% | $1.34 |
| Weighted Average | 100% | $113.06 |
Based on our comprehensive valuation analysis, Ares Management Corp's weighted average intrinsic value is $113.06, which is approximately 29.3% below the current market price of $159.88.
Key investment considerations:
Given these factors, we believe Ares Management Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.