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Upturn AI Summary - About
Ares Capital Corporation(ARCC)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for ARCC
11/06/2026: ARCC (2-star) is currently NOT-A-BUY. Pass it for now.
Ares Capital Corporation is a prominent Business Development Company that specializes in providing flexible financing solutions to middle-market firms. The company has a leading position in the private credit market, supported by the extensive resources and expertise of its external manager, Ares Management. Its primary investment story centers on delivering consistent dividend income through a diversified, high-quality loan portfolio. However, investors face risks related to economic sensitivity, potential loan defaults, and intense competition in the private credit sector. The stock is particularly well-suited for income-focused investors who should monitor developments in interest rates and portfolio credit quality.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Mixed fit | While the company has grown, its structure is optimized for income rather than aggressive capital appreciation. |
| Momentum investor | Weak fit | This stock is primarily an income play and typically does not exhibit the high-volatility price momentum sought by momentum traders. |
| Value investor | Mixed fit | Valuation is often tied to NAV, making it a stable play but rarely a deep-value opportunity. |
| Dividend investor | Strong fit | ARCC is a classic selection for income-focused investors due to its consistent dividend distribution history. |
| Low-risk investor | Mixed fit | While dividends are steady, the underlying credit risk of the middle-market loan portfolio introduces moderate risk. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | Medium | The stock can fluctuate with interest rate expectations and general credit market sentiment. |
| Valuation risk | Medium | The stock price relative to NAV can impact total returns for investors. |
| Competition risk (private credit) | Medium / high | Increased competition may compress yields and pressure loan origination spreads. |
| Business quality | Strong | Ares has a proven track record of underwriting and platform management. |
| Dividend income | High | The primary investment thesis is built on reliable and consistent income streams. |
| Execution risk | Medium | Effective management of the massive portfolio is essential for maintaining asset quality. |
Price Behavior
Strong Uptrend
The stock has maintained a strong upward price trend across the last three quarters.
Smooth
The stock has moved along a generally orderly path with only modest fluctuations.
Analysis of Past Performance
Type Stock | Historic Profit 10.21% | Avg. Invested days 61 | Today’s Advisory PASS |
Upturn Advisory Rating  | Upturn Advisory Performance  4.0 | Stock Returns Performance  2.0 |
| Profits based on simulation | Last Close 11/06/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 13.97B USD | Price to earnings Ratio 15.99 | 1Y Target Price 21 |
Price to earnings Ratio 15.99 | 1Y Target Price 21 | ||
Volume (30-day avg) 4.8M shares | Beta 0.64 | 52 Weeks Range 16.55 - 19.83 | Updated Date 11/05/2026 |
52 Weeks Range 16.55 - 19.83 | Updated Date 11/05/2026 | ||
Dividends yield (FY) 9.87% | Basic EPS (TTM) 1.21 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Direct Lending | Interest income from senior secured and unitranche loans provided to middle-market companies. | The company earns money by charging interest on loans made to businesses. |
| Fee Income | Management and advisory fees earned on managed portfolios and investment activities. | Additional revenue is generated through service fees for managing various credit portfolios. |
Earnings Date
Report Date 2026-10-27 | When Before Market | Estimate 0.48 | Actual 0.46 |
Profitability
Profit Margin 28.35% | Operating Margin (TTM) 72.74% |
Management Effectiveness
Return on Assets (TTM) 4.78% | Return on Equity (TTM) 6.19% |
Valuation
Trailing PE 15.99 | Forward PE 10.08 | Enterprise Value 28.37B | Price to Sales(TTM) 4.53 |
Enterprise Value 28.37B | Price to Sales(TTM) 4.53 | ||
Enterprise Value to Revenue 27.04 | Enterprise Value to EBITDA 10.19 | Shares Outstanding 722.19M | Shares Floating - |
Shares Outstanding 722.19M | Shares Floating - | ||
Percent Insiders 0.56 | Percent Institutions 36.12 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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