Is Ares Management Corp. overvalued or undervalued?

As of 2 May 2024, Ares Management Corp. has moved from an expensive to a very expensive valuation grade. The company's current valuation indicates it is overvalued, particularly when considering its P/E ratio of 119, which significantly exceeds the industry average. Additionally, the EV to EBITDA ratio stands at 37.15, further illustrating the high valuation compared to peers. The dividend yield is notably high at 209.68%, but this does not compensate for the elevated valuation metrics.
In comparison to its peers, Ares Management Corp. has a P/E ratio that is substantially higher than BlackRock, Inc. at 23.40 and KKR & Co., Inc. at 48.83, both of which are also categorized as very expensive. The EV to EBITDA ratio for Blackstone, Inc. is 24.63, reinforcing the notion that Ares is trading at a premium relative to its competitors. While Ares has delivered strong returns over the past year, outperforming the S&P 500, the current valuation suggests that investors may be paying too much for future growth potential.