Upside case
Bull case
$50+159.2%
ARCC would need investors to value it at roughly 26x earnings — about 16x more generous than today's 10x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Ares Capital Corporation (ARCC) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
32
analysts
25 bullish · 0 bearish · 32 covering ARCC
Strong Buy
0
Buy
25
Hold
7
Sell
0
Strong Sell
0
Consensus Target
$22
+13.1% vs today
Scenario Range
$16 – $50
Model bear to bull value window
Coverage
32
Published analyst ratings
Valuation Context
10.1x
Forward P/E · Market cap $13.9B
ARCC price targets
Three scenarios for where ARCC stock could go
Current
~$19
Confidence
42 / 100
Updated
May 1, 2026
Where we are now
Current · $19
Bear
$16
Base
$30
Bull
$50
Market caseClosest to today
Base case
$30+53.6%
At 16x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$16-18.3%
If investor confidence fades or macro conditions deteriorate, a 2x multiple contraction could push ARCC down roughly 18% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Ares Capital Corporation
ARCC · NASDAQFinancial ServicesAsset ManagementDecember year-end
Ares Capital Corporation is a business development company that provides debt and equity financing to middle-market companies. It generates revenue primarily through interest income from its loan portfolio — which accounts for the majority of its earnings — supplemented by capital gains from equity investments and fee income from portfolio management. The company's competitive advantage lies in its scale as the largest BDC in the U.S., its affiliation with the Ares Management platform, and its ability to provide large, flexible financing solutions that smaller competitors cannot match.
Market Cap
$13.9B
Net Income TTM
$1.1B
ARCC Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
27%Exceptional
12 quarters tracked
Revenue Beat Rate
0%Mixed
vs consensus estimates
Avg EPS Surprise
-0.4%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 1 of 4Q3 2025
EPS
$0.50/$0.51
Revenue
$579M/$749M
Q4 2025
EPS
$0.50/$0.50
Revenue
$655M/$768M
Q1 2026
EPS
$0.50/$0.50
Revenue
$793M/$793M
Q2 2026
EPS
$0.47/$0.48
Revenue
$763M/$778M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.50/$0.51 | -1.2% | $579M/$749M | -22.7% |
| Q4 2025 | $0.50/$0.50 | -0.6% | $655M/$768M | -14.7% |
| Q1 2026 | $0.50/$0.50 | +0.0% | $793M/$793M | -0.0% |
| Q2 2026 | $0.47/$0.48 | -2.1% | $763M/$778M | -1.9% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$3.8B
+21.5% YoY
FY2
$4.9B
+28.9% YoY
EPS Outlook
FY1
$2.40
+49.9% YoY
FY2
$2.86
+19.0% YoY
Trailing FCF (TTM)$1.1B
Next Earnings
—
Expected EPS
—
Expected Revenue
—
ARCC beat EPS estimates in 1 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
ARCC Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Slightly Overvalued
Fair value est. $18 — implies -8.8% from today's price.
Premium to Fair Value
8.8%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
ARCC
10.4x
vs
S&P 500
25.1x
59% discount
vs Financial Services Trailing P/E
ARCC
10.4x
vs
Financial Services
13.3x
22% discount
vs ARCC 5Y Avg P/E
Today
10.4x
vs
5Y Average
9.8x
+6% premium
Forward PE
10.1x
S&P 500
19.1x
-47%
Financial Services
10.4x
-3%
5Y Avg
—
—
Trailing PE
10.4x
S&P 500
25.1x
-59%
Financial Services
13.3x
-22%
5Y Avg
9.8x
+6%
PEG Ratio
1.01x
S&P 500
1.72x
-41%
Financial Services
1.01x
-0%
5Y Avg
—
—
EV/EBITDA
13.2x
S&P 500
15.2x
-13%
Financial Services
11.4x
+16%
5Y Avg
18.1x
-27%
Price/FCF
12.2x
S&P 500
21.1x
-42%
Financial Services
10.6x
+15%
5Y Avg
11.5x
+6%
Price/Sales
4.4x
S&P 500
3.1x
+41%
Financial Services
2.2x
+98%
5Y Avg
5.6x
-22%
Dividend Yield
1.98%
S&P 500
1.87%
+6%
Financial Services
2.70%
-27%
5Y Avg
7.21%
-73%
| Metric | ARCC | S&P 500 | Financial Services | 5Y Avg ARCC |
|---|---|---|---|---|
| Forward PE | 10.1x | 19.1x-47% | 10.4x | — |
| Trailing PE | 10.4x | 25.1x-59% | 13.3x-22% | 9.8x |
| PEG Ratio | 1.01x | 1.72x-41% | 1.01x | — |
| EV/EBITDA | 13.2x | 15.2x-13% | 11.4x+16% | 18.1x-27% |
| Price/FCF | 12.2x | 21.1x-42% | 10.6x+15% | 11.5x |
| Price/Sales | 4.4x | 3.1x+41% | 2.2x+98% | 5.6x-22% |
| Dividend Yield | 1.98% | 1.87% | 2.70% | 7.21% |
ARCC trades above S&P 500 benchmarks on 1 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolARCC Financial Health
Verdict
Stressed
ARCC generates 8.1% ROE and 3.8% return on assets — the two primary signals for banking profitability. FCF-based metrics are not applicable to financial companies.
Earnings Engine
Revenue, profitability, and return on capital
Revenue (TTM)
Trailing-twelve-month sales base
—
Revenue Growth
TTM vs prior year
—
Operating Margin
Operating income divided by revenue
—
Net Margin
Net income divided by revenue
—
EPS (TTM)
Diluted earnings per share, trailing twelve months
$1.60
ROE
Return on equity — the primary profitability signal for banks
8.1%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
5.7%
ROA
Return on assets, trailing twelve months
3.8%
Cash & Equivalents
Liquid assets on the balance sheet
$924M
Net Debt
Total debt minus cash
$15.1B
FCF Analysis
Traditional FCF and debt/FCF ratios are not meaningful for financial companies. Focus on ROE and ROA above.
ROE
Return on equity — the headline bank profitability metric
8.1%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.0%
Dividend
2.0%
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
$0.38
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
718M
All figures from the trailing twelve months. For financial companies, ROE and ROA are the primary health signals — FCF-based metrics are not applicable.
Open full ratios pageARCC Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Market Volatility
ARCC's stock price and trading volume can be significantly affected by general stock market fluctuations, which may not be directly related to the company's operating performance. This volatility can lead to unpredictable investment returns.
High Risk
Credit Risk
Defaults or downgrades in ARCC's portfolio companies pose a principal risk. The company has disclosed that nearly $1 billion of its investments in software companies are at medium risk of disruption from artificial intelligence, potentially impacting future earnings.
High Risk
Net Asset Value Compression
Falling fair values on loans or equity positions can lead to NAV compression. ARCC reported a significant increase in net unrealized losses in Q1 2026, more than quadrupling from the previous year, reflecting market concerns about its portfolio.
Medium
Interest Rate Sensitivity
ARCC is exposed to risks associated with changes in interest rates, which can significantly impact its investments and net investment income. Rising funding costs can reduce net yields, affecting overall profitability.
Medium
Economic Uncertainty
Uncertainty surrounding the U.S. economy, trade policies, and geopolitical risks can materially impact ARCC's business and operations. Such economic factors can lead to decreased demand for credit and investment.
Medium
AI Disruption
Investments tied to software companies are at risk of disruption from artificial intelligence, which could impact earnings. Approximately 20% of private credit industry loans have been made to software companies, heightening this risk.
Lower
Liquidity Risk
Concerns exist regarding liquidity in the private credit market, with reports of companies limiting redemptions from their private credit funds. This could affect ARCC's ability to meet its financial obligations.
Lower
Management Team Risk
While ARCC is noted for having one of the best management teams and a strong track record, the departure of key personnel could pose a risk. Changes in management could impact strategic direction and operational effectiveness.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why ARCC Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Scale and Competitive Advantage
ARCC's unmatched scale allows it to originate and structure deals that smaller competitors cannot, creating a durable competitive advantage. Its large portfolio of over 600 companies provides significant diversification, reducing idiosyncratic credit risk.
Attractive Yield and Valuation
The company offers a compelling dividend yield, often exceeding 10%, supported by recurring cash flows from a diversified loan book. It is also seen as trading at an attractive valuation, sometimes below its net asset value (NAV), presenting an opportunity for income-focused investors.
Interest Rate Sensitivity
ARCC is favorably positioned for a potential rise in interest rates, which is expected to enhance its net investment income due to its focus on first and second lien senior secured loans. The company has a 'spillover income' safety net and robust dividend coverage, mitigating concerns about dividend sustainability.
Portfolio Quality and Stability
The overall credit quality of ARCC's portfolio remains robust, with non-accrual rates historically low and well below averages. A significant portion of its investments are first lien senior secured loans, meaning ARCC gets paid first if a company fails.
Track Record
ARCC has a history of outperforming the S&P 500 and the broader BDC index since its IPO, demonstrating disciplined underwriting and a resilient credit platform across economic cycles. The company also maintained its dividend during the 2020 crash, further building investor confidence.
Insider Confidence
Recent purchases of shares by the CEO and CFO indicate insider confidence in the company's prospects.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
ARCC Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$19.35
52W Range Position
32%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$17.40
+11.2% from the low
52-Week High
$23.42
-17.4% from the high
1 Month
+5.74%
3 Month
+2.98%
YTD
-5.3%
1 Year
-5.7%
3Y CAGR
+2.0%
5Y CAGR
+0.3%
10Y CAGR
+2.5%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
ARCC vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
10.1x
vs 8.5x median
+19% above peer median
Revenue Growth
+21.5%
vs +32.1% median
-33% below peer median
Net Margin
—
vs — median
Peer median unavailable
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
ARC ARCC Ares Capital Corporation | $13.9B | 10.1x | +21.5% | — | Buy | +13.1% |
GBD GBDC Golub Capital BDC, Inc. | $3.5B | 9.3x | +34.1% | — | Buy | +6.9% |
OBD OBDC Blue Owl Capital Corporation | $6.1B | 8.7x | +34.9% | — | Buy | +21.7% |
TPV TPVG TriplePoint Venture Growth BDC Corp. | $222M | 5.9x | +30.2% | — | Hold | +63.3% |
HTG HTGC Hercules Capital, Inc. | $3.0B | 8.5x | +9.7% | — | Buy | +14.2% |
PSE PSEC Prospect Capital Corporation | $1.3B | 5.9x | — | — | Hold | -9.1% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
ARCC Dividend and Capital Return
ARCC returns 2.0% total yield, led by a 1.98% dividend.
Dividend UnknownFCF Well Covered
Total Shareholder Yield
2.0%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
1.98%
Payout Ratio
—
How ARCC Splits Its Return
Div 1.98%
Dividend 1.98%Buybacks 0.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.38
Growth Streak
Consecutive years of dividend increases
0Y
3Y Div CAGR
0.9%
5Y Div CAGR
3.7%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
718M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.96 | — | — | — |
| 2025 | $1.92 | 0.0% | 0.0% | 1.9% |
| 2024 | $1.92 | 0.0% | 0.0% | 8.3% |
| 2023 | $1.92 | +2.7% | 0.0% | 9.0% |
| 2022 | $1.87 | +15.4% | 0.0% | 9.5% |
FAQ
7 questionsARCC Investor Questions
Common questions answered from live analyst data and company financials.
01Is Ares Capital Corporation (ARCC) stock a buy or sell in 2026?
Ares Capital Corporation (ARCC) is rated Buy by Wall Street analysts as of 2026. Of 32 analysts covering the stock, 25 rate it Buy or Strong Buy, 7 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $22, implying +13.1% from the current price of $19. The bear case scenario is $16 and the bull case is $50.
02What is the ARCC stock price target for 2026?
The Wall Street consensus price target for ARCC is $22 based on 32 analyst estimates. The high-end target is $24 (+24.0% from today), and the low-end target is $20 (+3.4%). The base case model target is $30.
03Is Ares Capital Corporation (ARCC) stock overvalued in 2026?
ARCC trades at 10.1x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals slightly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Ares Capital Corporation (ARCC) stock in 2026?
The primary risks for ARCC in 2026 are: (1) Market Volatility — ARCC's stock price and trading volume can be significantly affected by general stock market fluctuations, which may not be directly related to the company's operating performance. (2) Credit Risk — Defaults or downgrades in ARCC's portfolio companies pose a principal risk. (3) Net Asset Value Compression — Falling fair values on loans or equity positions can lead to NAV compression. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Ares Capital Corporation's revenue and earnings forecast?
Analyst consensus estimates ARCC will report consensus revenue of $3.8B (+21.5% year-over-year) and EPS of $2.40 (+49.9% year-over-year) for the upcoming fiscal year. The following year, analysts project $4.9B in revenue.
06When does Ares Capital Corporation (ARCC) report its next earnings?
A confirmed upcoming earnings date for ARCC is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Ares Capital Corporation generate?
Ares Capital Corporation (ARCC) generated $1.1B in free cash flow over the trailing twelve months. ARCC returns capital to shareholders through dividends (2.0% yield) and share repurchases ($0 TTM).