Ares Capital CorporationARCC
NasdaqGS•Financial Services•Asset Management
Ares Capital Corporation is a business development company specializing in growth capital, acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in sports, media & entertainment, industrials & business services, infrastructure & power, financial institution groups, software & technology, specialty healthcare, consumer, retail & services, energy and the basic and growth manufacturing, consumer products, health care products, and information technology service sectors. The fund will also consider investments in industries such as restaurants, retail, oil and gas, and technology sectors. It invests in the United States based companies. It focuses on investments in Northeast, Mid-Atlantic, Southeast and Southwest regions from its New York office, the Midwest region, from the Chicago office, and the Western region from the Los Angeles office. The fund typically invests between $30 million and $500 million, in companies with an EBITDA between $10 million and $250 million. It makes debt investments between $10 million and $100 million The fund invests through revolvers, first lien loans, warrants, unitranche structures, second lien loans, mezzanine debt, private high yield, junior capital, subordinated debt, and non-control preferred and common equity. The fund also selectively considers third-party-led senior and subordinated debt financings and opportunistically considers the purchase of stressed and discounted debt positions. The fund prefers to be an agent and/or lead the transactions in which it invests. The fund also seeks board representation in its portfolio companies.
Ares Capital Corporation (ARCC) reported trailing twelve months revenue of $3.08B as of March 2026, a 2.1% increase year-over-year. Quarterly revenue reached $763.00M, reflecting continued top-line momentum.
Ares Capital Corporation generated $1.15B in TTM net income, with quarterly EBITDA of $404.00M. The operating margin expanded from 50.8% to 52.9%, suggesting improving cost efficiency and pricing discipline.
The spread between operating margin (52.9%) and net margin (12.1%) indicates significant non-operating expenses or interest burden. Net margin has narrowed from 32.9% a year ago, reflecting increased costs or interest expense.
ARCC trades at a P/E of 11.1x (below the broader market average) and a P/S of 4.1x. The price-to-book ratio of 0.9x suggests the stock trades below its book value.
The company generated $184.00M in free cash flow over the trailing twelve months, a 161.5% increase year-over-year, indicating cash generation ability. The balance sheet shows $30.68B in total assets with $15.85B in long-term debt against $14.06B in stockholders equity for a debt-to-equity ratio of 1.1. Data based on the most recent quarterly reports.
Competitive analysis based on 15 quarters of fundamental data
Operating margins are positive at ~49.3% on average, but show some variability — pricing power may be sensitive to market conditions.
ROE is positive at ~10.4% on average, adequate but below the threshold typically associated with wide moats.
Only 1 of the last 8 quarters had positive FCF — the business may require external capital to sustain operations.
TTM revenue has grown consistently (6 of 7 quarters up), with ~9.4% growth over the period. Strong demand durability.
Data-driven red flags and warnings across 15 quarters
Margins are stable or improving at ~48.3% — no sign of cost or pricing stress.
Free cash flow has been negative in 7 of the last 8 quarters — earnings are not translating to cash.
D/E ratio is 1.1 — conservative capital structure with low financial risk.
Revenue is stable or growing over recent quarters — demand appears durable.
The last 7 consecutive quarters had negative FCF — the company is burning cash and may need external funding.
Shares outstanding increased 16.6% — significant dilution, likely from stock compensation or capital raises.
Quarterly standardized metrics.
Stock price and market valuation
Revenue and earnings growth across quarters
Assets, cash, debt, and leverage
Price multiples and return ratios
Operating efficiency and return metrics
Free cash flow, earnings quality, and capital allocation