Bakkt (NYSE:BKKT) and Ares Management (NYSE:ARES) Critical Analysis

Bakkt (NYSE:BKKT) and Ares Management (NYSE:ARES) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Risk and Volatility

Bakkt has a beta of 5.92, suggesting that its share price is 492% more volatile than the S&P 500. Comparatively, Ares Management has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Earnings and Valuation

This table compares Bakkt and Ares Management”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bakkt	$1.12 billion	0.34	-$107.21 million	$0.45	18.56
Ares Management	$5.60 billion	8.27	$527.36 million	$2.18	64.35

Ares Management has higher revenue and earnings than Bakkt. Bakkt is trading at a lower price-to-earnings ratio than Ares Management, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bakkt and Ares Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bakkt	-2.78%	-41.11%	-30.36%
Ares Management	10.63%	25.42%	6.35%

Insider & Institutional Ownership

11.1% of Bakkt shares are owned by institutional investors. Comparatively, 50.0% of Ares Management shares are owned by institutional investors. 10.1% of Bakkt shares are owned by company insiders. Comparatively, 34.7% of Ares Management shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bakkt and Ares Management, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bakkt	1	0	1	0	2.00
Ares Management	0	6	11	1	2.72

Bakkt currently has a consensus price target of $12.00, suggesting a potential upside of 43.71%. Ares Management has a consensus price target of $160.47, suggesting a potential upside of 14.39%. Given Bakkt’s higher probable upside, equities research analysts clearly believe Bakkt is more favorable than Ares Management.

Summary

Ares Management beats Bakkt on 13 of the 15 factors compared between the two stocks.

About Bakkt

Bakkt Holdings, Inc. offers software as a service and application programming interface solutions for crypto and loyalty, powering engagement, and performance. The company operates Bakkt Marketplace, a platform that enables consumers to buy, sell, and store crypto in an embedded web experience; Bakkt Crypto, a platform that supports clients with a range of crypto solutions; and Bakkt Trust, institutional-grade qualified custody solution for market participants. Its platform also offers a range of loyalty solutions, including redemption solutions for various rewards categories comprising travel, gift cards, and merchandise; travel solutions that offer a retail e-commerce booking platform, as well as live-agent booking and servicing; and unified shopping experience. The company was founded in 2018 and is headquartered in Alpharetta, Georgia.

About Ares Management

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets. Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies. The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies. Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate. The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia. Ares Management GP LLC is the general partner of the company.