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Ares Management heads into its October 29 earnings with short sellers holding a notable position, the Street broadly bullish, and the stock trailing its alternatives-manager peers by a meaningful margin after a sharp monthly decline.
The short side has been gradually retreating, but the position remains large enough to matter. Short interest in ARES settled at 7.1% of the free float as of October 8, down roughly 1% over the past week and close to flat over the prior month's peak. The retreat from mid-September highs, when short shares were running above 16 million, is modest rather than decisive. Borrowing costs have fallen sharply, down 25% on the week to 0.49%, the lowest level in the 30-day window, which suggests the bears who remain are paying very little to hold their positions. Availability is loose at around 302%, meaning there are roughly three shares available to borrow for every one already out on loan. That rules out any squeeze pressure in the near term. Options positioning tells a different story: the put/call ratio at 2.40 remains structurally elevated and has been above 2.0 for the entire 30-day history in the data, though it is slightly below its 20-day average of 2.47 and well clear of the 52-week high of 2.90 set in September. The options market is persistently defensive on ARES, but the intensity has eased a touch from the peak.
The Street's message is more constructive than the short book implies. Two fresh initiations landed this month: Wells Fargo started at Overweight with a $136 target on October 2, and Piper Sandler did the same at $150 on September 24. Both join a group of analysts who lifted targets in August after the Q2 print, with RBC at $168, Oppenheimer at $162, and JPMorgan at $153 all moving higher. The mean target across the group now stands at $146.65, representing about 25% implied upside from the October 9 close of $117.22. Bulls anchor their case on scale: $671.3 billion of total AUM and $409.9 billion of fee-earning AUM at end-June 2026, with AUM and fee-related earnings seen compounding as dry powder is deployed across credit, real assets, and digital infrastructure. Bears point to the Q2 miss, where after-tax realized net income came in at $1.24 per share below estimates, fee-related performance fees underwhelmed, and fee-related earnings of $1.33 per share with a 42.4% margin signalled pressure on core profitability. The forward earnings growth factor scores in the 91st percentile on 12-month forward EPS growth, but EPS surprise ranks in only the 24th percentile, a gap that encapsulates the tension between where analysts expect the trajectory to go and where the recent prints have landed.
Valuation has compressed with the stock. The price/earnings multiple has fallen roughly 2.8 points over the past 30 days to 17.0x, and the price/book ratio is down nearly 0.9 points over the same period to 4.5x. Both moves reflect the 15.4% monthly price decline rather than a de-rating from the Street. EV/EBITDA is unchanged at 20.7x on the most recent data. The short score at 58.7 has eased from the mid-60s range seen in late September, though it remains elevated enough to rank in only the 13th percentile on short score rank within the sector, implying the bearish positioning is above average relative to peers.
On ownership, the major passive holders have been adding. BlackRock reported 16.9 million shares as of September 30, up 713,000 from the prior period, and State Street added 817,000 shares to reach 9.0 million over the same window. Co-founder Antony Ressler holds 33.1% of the class as disclosed in August, down from 34.2% previously, reflecting modest dilution rather than a disposal. The most recent insider activity of note was CEO Michael Arougheti and Co-President R. Kipp deVeer each filing 82,957 shares in June under transaction code F, which represents tax withholding on vested awards rather than open-market selling. Net insider buying over the trailing 90 days is zero, so there is no conviction signal from the executive suite.
The stock's peer group has not shared its pain this week. KKR gained 0.7%, BX rose 2.3%, and OWL added 4.5% over the five days ending October 9, while ARES slipped 0.3%. That divergence, combined with the 15% monthly drawdown, suggests stock-specific factors rather than sector-wide headwinds are driving the gap. The July 31 earnings print produced an 11.6% one-day gain, the most recent data point available, so the market's reaction to a beat can be sharp in both directions.
The next focal point is the October 29 earnings release, 19 days away, where fee-related earnings margin and AUM deployment pace will be the metrics that determine whether the Street's constructive case or the bears' profitability concerns prove better grounded.
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