DCF Studio

    ARES · NYQ · Financial Services

    Ares Management Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 17.47

    Market price

    USD 132.96

    Implied upside

    -86.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.
    AdjustedReported capital expenditure averages 1.67% of revenue against depreciation and amortisation of 6.49%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 6.49% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Current EV/EBITDA of 50.1x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 17.47-86.9%
    Exit multiple
    USD 92.70-30.3%
    Market price
    USD 132.96

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 4.9bnUSD 5.8bnUSD 6.8bnUSD 7.7bnUSD 8.7bnUSD 9.6bnUSD 10.4bnUSD 11.1bnUSD 11.6bnUSD 11.9bn+10.3%
    EBITUSD 900.5mUSD 1.1bnUSD 1.2bnUSD 1.4bnUSD 1.6bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bn+10.3%
    NOPATUSD 778.7mUSD 921.6mUSD 1.1bnUSD 1.2bnUSD 1.4bnUSD 1.5bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bn+10.3%
    Add depreciation & amortisationUSD 319.2mUSD 377.7mUSD 439.5mUSD 502.8mUSD 565.1mUSD 624.0mUSD 676.7mUSD 720.4mUSD 752.7mUSD 771.5m+10.3%
    Less capital expenditureUSD -319.2mUSD -404.8mUSD -502.7mUSD -611.0mUSD -727.4mUSD -848.0mUSD -968.2mUSD -1.1bnUSD -1.2bnUSD -1.3bn+16.6%
    Capex, % of revenue6.5%7.0%7.4%7.9%8.4%8.8%9.3%9.8%10.2%10.7%-
    Less increase in working capitalUSD -77.1mUSD 101.3mUSD 107.0mUSD 109.4mUSD 107.9mUSD 101.9mUSD 91.2mUSD 75.7mUSD 55.9mUSD 32.6m-
    Free cashflow to firmUSD 701.6mUSD 995.8mUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.5bnUSD 1.4bn+8.1%
    Discount factor0.95590.87350.79810.72930.66640.60890.55640.50840.46450.4245-
    Present valueUSD 670.7mUSD 869.7mUSD 890.9mUSD 895.3mUSD 882.5mUSD 852.7mUSD 807.1mUSD 747.9mUSD 678.2mUSD 601.2m-
    Present Value Of The ForecastUSD 7.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.340Reported 1.507, pulled toward 1.0 (Blume)
    Cost of equity10.56%Risk-free + beta x equity risk premium
    Cost of debt6.89%Risk-free + 200bp, the spread for a CCC rating at 1.2x interest cover, capped at 200bp because one year's cover is too noisy to charge more. Book interest / average debt was lower, at 5.6%.
    Market capitalisationUSD 44.1bn75.6% of capital
    Total debtUSD 14.2bn24.4% of capital, book value as a proxy
    Tax rate13.5%Effective, capped at statutory
    WACC9.44%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 17.47

    52% of EV

    Forecast FCFF, final year
    USD 1.4bn
    Capex at depreciation, working capital in reinvestment
    USD 1.9bn
    Less reinvestment at g/ROIC (26.5% of NOPAT)
    USD -498.5m
    Capitalised
    USD 1.4bn
    ROIC (WACC floor)
    9.4%
    Terminal value, undiscounted
    USD 20.4bn
    Terminal value, discounted
    USD 8.7bn
    Enterprise value
    USD 16.6bn
    Less net debt
    USD 12.8bn
    Equity value
    USD 3.8bn

    Exit at 20.0x EBITDA

    Value per shareUSD 92.70

    76% of EV

    Terminal value, undiscounted
    USD 59.0bn
    Terminal value, discounted
    USD 25.0bn
    Enterprise value
    USD 32.9bn
    Less net debt
    USD 12.8bn
    Equity value
    USD 20.1bn

    Spread between methods: 137%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.44%42.1740.9339.7038.4637.23
    8.44%29.3128.2827.2526.2225.19
    9.44%19.2118.3417.4716.6015.73
    10.44%11.0810.349.598.858.11
    11.44%4.403.763.122.481.83

    Outlined: this model. Green text: above today's price of 132.96. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year22.4%7.8%19.2%
    EBIT margin24.4%18.3%46.8%
    Discount rate-9.4%4.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.