MODEL VERDICT
Ares Capital Corporation (ARCC)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.27 | $19.25 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.27 | $18.67 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.27 | $19.09 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.27 | $18.97 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.62 | $18.09 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Industry Median P/E 9 industry peers | $17.79 | -7.6% | 30% | A | Peer Data |
| Price / Book 10 industry peers | $17.82 | -7.4% | 25% | B | Model Driven |
| Price / Tangible Book 10 bank peers | $17.82 | -7.4% | 20% | B+ | Bank Primary |
| Dividend Yield 9 industry peers | $5.96 | -69.0% | 10% | B | Supplementary |
| Earnings Yield 9 industry peers | $17.79 | -7.6% | 8% | B | Data |
| Forward P/E 10 analyst estimates | $16.26 | -15.5% | 7% | A- | Analyst Est. |
| Weighted Output Blended model output | $17.56 | -8.8% | 100% | 93 | SLIGHTLY OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 6× | 8× | 10× (Current) | 12× | 14× |
|---|---|---|---|---|---|
| Bear Case (4%) | $12 | $15 | $19 | $23 | $27 |
| Conservative (7%) | $12 | $16 | $20 | $24 | $28 |
| Base Case (10.3%) | $12 | $16 | $21 | $25 | $29 |
| Bull Case (14%) | $13 | $17 | $21 | $25 | $30 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 10.53 | 10.03 | 6.04 | 15.52 | 3.55 |
| EV/EBIT | 19.99 | 16.79 | 12.68 | 33.04 | 8.41 |
| EV/EBITDA | 19.99 | 16.79 | 12.68 | 33.04 | 8.41 |
| P/FCF | 11.28 | 11.52 | 9.76 | 12.82 | 1.15 |
| P/TBV | 1.02 | 1.02 | 0.99 | 1.07 | 0.03 |
| P/B Ratio | 1.02 | 1.02 | 0.99 | 1.07 | 0.03 |
| Div Yield | 0.08 | 0.09 | 0.02 | 0.10 | 0.03 |
| P/S Ratio | 6.24 | 5.77 | 4.50 | 8.35 | 1.59 |
Based on our peer multiples analysis with 17 valuation metrics, the model estimates ARCC's fair value at $17.56 vs the current price of $19.25, implying -8.8% downside potential. Model verdict: Slightly Overvalued. Confidence: 93/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $17.56 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $16.09 (P10) to $19.13 (P90), with a median of $17.55.
ARCC's current P/E of 10.3x compares to the industry median of 9.6x (9 peers in the group). This represents a +8.2% premium to the industry. The historical average P/E is 10.5x over 7 years. Signal: Fair Value.
32 analysts cover ARCC with a consensus rating of Buy. The consensus price target is $21.88 (range: $20.00 — $24.00), implying +13.7% upside from the current price. Grade breakdown: Strong Buy (0), Buy (25), Hold (7), Sell (0), Strong Sell (0).
The model confidence score is 93/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (8), and model agreement (10). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that ARCC's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -1.6σ, meaning margins are 1.6 standard deviations below their historical average. If margins revert to the 7-year mean (61.8%), the model estimates fair value drops by 5220.0% to approximately $29. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.