Ares Management stock barely budged on Friday, up about 0.6% to US$128.24, which indicates traders viewed Q3 2026 as business as usual. The headline was anything but quiet. Management fees approached US$1.1b for the quarter and the fee related earnings margin held at about 42%, keeping the focus squarely on the strength of the fee engine rather than short term earnings per share volatility.
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Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs. Q3 2025): US$1,182.7m vs. US$1,454.6m (down 18.7%)
- Net Income (Q3 2026 vs. Q3 2025): US$60.0m vs. US$252.5m (down 76.2%)
- Basic EPS (Q3 2026 vs. Q3 2025): US$0.26 vs. US$1.15 (down 77.0%)
- Fee Related Earnings Margin (Q3 2026 vs. Q3 2025): 42.5% vs. approximately 41.4% (up about 1.1 percentage points)
Ares Management is sitting on $117 billion not yet earning fees. Ask Charlie what Ares Management plans to do with $117B idle AUM.
Ares fee engine backs credit and infra ambitions
The bullish view focuses on Ares Management turning platform growth into durable fee power.
"The main factor that has to go right is that Ares Management continues to deploy its significant available capital into performing credit, digital infrastructure and logistics assets while maintaining strong credit performance and fundraising across both institutional and wealth channels."
Q3 results met key milestones on that score. The firm deployed about US$35b in the quarter and still holds roughly US$174b of available capital. Fee-paying AUM sits at US$416b, with another US$117b not yet paying fees. Wealth channel AUM rose 41% year on year to US$82b, which supports the fundraising leg of the thesis.
One Narrative disagrees with today's price. → See where this Narrative says Ares Management should trade.
Ares margin fears meet resilient fee engine
Bearish research argues that Ares Management's cost base could eat into operating leverage as the platform scales and distribution widens.
"Although Ares Management reports strong growth in AUM and fee-related earnings, the earlier concern about rising general and administrative expenses remains live because the business continues to add new leases and expand wealth-channel distribution capacity."
The latest quarter does not really confirm that squeeze. Fee related earnings margin sits around 42%, slightly higher than a year ago, even as wealth AUM climbs 41% and fundraising expenses grow, so the feared margin compression has not yet shown up.
Hunt For Mispriced Cash Engines
Ares Management just showed how stable fee revenue can balance a volatile income stream. The real opportunity may lie in stocks that appear undervalued before wider attention focuses on them.
- Company 1 - 42% below our estimate - sell modular data center builds that shift buyers toward integrated AI hardware, software and services contracts.
- Company 2 - 20% below our estimate - grow a money platform where account, card and asset activity feeds fee income and interest sharing.
- Company 3 - 30% below our estimate - build AI centric networking and infrastructure so recurring service contracts progressively displace one off hardware sales.
Three companies from the same screener. Open all 30 potentially undervalued companies →
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