ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - NYSE:ARCO - VGG0457F1071 - Common Stock
7.06 USD
+0.06 (+0.86%)
7.06 USD
0 (0%)
Taking everything into account, ARCO scores 4 out of 10 in our fundamental rating. ARCO was compared to 132 industry peers in the Hotels, Restaurants & Leisure industry. ARCO has a medium profitability rating, but doesn't score so well on its financial health evaluation. ARCO has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year ARCO was profitable.
In the past year ARCO had a positive cash flow from operations.
ARCO had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ARCO had a positive operating cash flow.
1.2 Ratios
ARCO's Return On Assets of 3.86% is in line compared to the rest of the industry. ARCO outperforms 58.33% of its industry peers.
ARCO has a better Return On Equity (22.43%) than 80.30% of its industry peers.
With a Return On Invested Capital value of 6.82%, ARCO perfoms like the industry average, outperforming 57.58% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARCO is in line with the industry average of 10.78%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.86% | ||
| ROE | 22.43% | ||
| ROIC | 6.82% |
ROA(3y)5.49%
ROA(5y)2.38%
ROE(3y)35.94%
ROE(5y)10.55%
ROIC(3y)8.93%
ROIC(5y)N/A
1.3 Margins
ARCO has a Profit Margin of 2.89%. This is comparable to the rest of the industry: ARCO outperforms 47.73% of its industry peers.
ARCO's Profit Margin has improved in the last couple of years.
The Operating Margin of ARCO (6.46%) is comparable to the rest of the industry.
ARCO's Operating Margin has improved in the last couple of years.
ARCO has a Gross Margin of 12.53%. This is amonst the worse of the industry: ARCO underperforms 89.39% of its industry peers.
ARCO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.46% | ||
| PM (TTM) | 2.89% | ||
| GM | 12.53% |
OM growth 3Y13.39%
OM growth 5Y5.96%
PM growth 3Y24.84%
PM growth 5Y4.27%
GM growth 3Y1.69%
GM growth 5Y14.64%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARCO is still creating some value.
The number of shares outstanding for ARCO remains at a similar level compared to 1 year ago.
ARCO has more shares outstanding than it did 5 years ago.
ARCO has a worse debt/assets ratio than last year.
2.2 Solvency
ARCO has an Altman-Z score of 2.15. This is not the best score and indicates that ARCO is in the grey zone with still only limited risk for bankruptcy at the moment.
ARCO has a better Altman-Z score (2.15) than 62.12% of its industry peers.
A Debt/Equity ratio of 1.68 is on the high side and indicates that ARCO has dependencies on debt financing.
ARCO's Debt to Equity ratio of 1.68 is in line compared to the rest of the industry. ARCO outperforms 55.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.15 |
ROIC/WACC0.92
WACC7.4%
2.3 Liquidity
ARCO has a Current Ratio of 0.80. This is a bad value and indicates that ARCO is not financially healthy enough and could expect problems in meeting its short term obligations.
ARCO's Current ratio of 0.80 is in line compared to the rest of the industry. ARCO outperforms 41.67% of its industry peers.
ARCO has a Quick Ratio of 0.80. This is a bad value and indicates that ARCO is not financially healthy enough and could expect problems in meeting its short term obligations.
ARCO's Quick ratio of 0.73 is in line compared to the rest of the industry. ARCO outperforms 40.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
ARCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -23.46%.
Measured over the past years, ARCO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.38% on average per year.
ARCO shows a small growth in Revenue. In the last year, the Revenue has grown by 0.09%.
Measured over the past years, ARCO shows a quite strong growth in Revenue. The Revenue has been growing by 8.60% on average per year.
EPS 1Y (TTM)-23.46%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-23.08%
Revenue 1Y (TTM)0.09%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%2.83%
3.2 Future
The Earnings Per Share is expected to grow by 9.48% on average over the next years. This is quite good.
Based on estimates for the next years, ARCO will show a small growth in Revenue. The Revenue will grow by 6.20% on average per year.
EPS Next Y-14.8%
EPS Next 2Y1.49%
EPS Next 3Y8.11%
EPS Next 5Y9.48%
Revenue Next Year4.47%
Revenue Next 2Y6.02%
Revenue Next 3Y6.68%
Revenue Next 5Y6.2%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 11.39 indicates a reasonable valuation of ARCO.
Based on the Price/Earnings ratio, ARCO is valued cheaper than 84.85% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.83, ARCO is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 9.52, the valuation of ARCO can be described as reasonable.
Based on the Price/Forward Earnings ratio, ARCO is valued cheaply inside the industry as 87.12% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 32.68, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.39 | ||
| Fwd PE | 9.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaper than 93.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.44 |
4.3 Compensation for Growth
The decent profitability rating of ARCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1
EPS Next 2Y1.49%
EPS Next 3Y8.11%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.43%.
Compared to an average industry Dividend Yield of 4.35, ARCO pays a better dividend. On top of this ARCO pays more dividend than 86.36% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, ARCO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
5.2 History
On average, the dividend of ARCO grows each year by 17.60%, which is quite nice.
ARCO has been paying a dividend for at least 10 years, so it has a reliable track record.
ARCO has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)17.6%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
38.85% of the earnings are spent on dividend by ARCO. This is a low number and sustainable payout ratio.
The dividend of ARCO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP38.85%
EPS Next 2Y1.49%
EPS Next 3Y8.11%
7.06
+0.06 (+0.86%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners43.24%
Inst Owner Change1%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.49B
Revenue(TTM)4.50B
Net Income(TTM)130.13M
Analysts81.43
Price Target9.97 (41.22%)
Short Float %2.04%
Short Ratio3.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
Yearly Dividend0.24
Dividend Growth(5Y)17.6%
DP38.85%
Div Incr Years2
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-6.23%
Min EPS beat(2)-40.32%
Max EPS beat(2)27.87%
EPS beat(4)3
Avg EPS beat(4)5.1%
Min EPS beat(4)-40.32%
Max EPS beat(4)28.68%
EPS beat(8)4
Avg EPS beat(8)0.54%
EPS beat(12)7
Avg EPS beat(12)13.28%
EPS beat(16)10
Avg EPS beat(16)21.58%
Revenue beat(2)1
Avg Revenue beat(2)-0.69%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)0.15%
Revenue beat(4)1
Avg Revenue beat(4)-1.22%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)0.15%
Revenue beat(8)5
Avg Revenue beat(8)0.36%
Revenue beat(12)7
Avg Revenue beat(12)0.18%
Revenue beat(16)11
Avg Revenue beat(16)1.36%
PT rev (1m)-0.73%
PT rev (3m)-4.07%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-1.61%
EPS NY rev (3m)-3.19%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.39 | ||
| Fwd PE | 9.52 | ||
| P/S | 0.33 | ||
| P/FCF | N/A | ||
| P/OCF | 5.7 | ||
| P/B | 2.56 | ||
| P/tB | 3.41 | ||
| EV/EBITDA | 4.44 |
EPS(TTM)0.62
EY8.78%
EPS(NY)0.74
Fwd EY10.51%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY17.54%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)1
Graham Number6.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.86% | ||
| ROE | 22.43% | ||
| ROCE | 11.19% | ||
| ROIC | 6.82% | ||
| ROICexc | 7.49% | ||
| ROICexgc | 7.97% | ||
| OM | 6.46% | ||
| PM (TTM) | 2.89% | ||
| GM | 12.53% | ||
| FCFM | N/A |
ROA(3y)5.49%
ROA(5y)2.38%
ROE(3y)35.94%
ROE(5y)10.55%
ROIC(3y)8.93%
ROIC(5y)N/A
ROICexc(3y)10.07%
ROICexc(5y)N/A
ROICexgc(3y)10.43%
ROICexgc(5y)N/A
ROCE(3y)14.7%
ROCE(5y)N/A
ROICexgc growth 3Y20.8%
ROICexgc growth 5Y13.02%
ROICexc growth 3Y20.55%
ROICexc growth 5Y12.8%
OM growth 3Y13.39%
OM growth 5Y5.96%
PM growth 3Y24.84%
PM growth 5Y4.27%
GM growth 3Y1.69%
GM growth 5Y14.64%
F-Score4
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.05 | ||
| Cap/Depr | 154.34% | ||
| Cap/Sales | 6.29% | ||
| Interest Coverage | 5.71 | ||
| Cash Conversion | 55.07% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 | ||
| Altman-Z | 2.15 |
F-Score4
WACC7.4%
ROIC/WACC0.92
Cap/Depr(3y)202.4%
Cap/Depr(5y)154.14%
Cap/Sales(3y)7.21%
Cap/Sales(5y)6.06%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-23.46%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-23.08%
EPS Next Y-14.8%
EPS Next 2Y1.49%
EPS Next 3Y8.11%
EPS Next 5Y9.48%
Revenue 1Y (TTM)0.09%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%2.83%
Revenue Next Year4.47%
Revenue Next 2Y6.02%
Revenue Next 3Y6.68%
Revenue Next 5Y6.2%
EBIT growth 1Y-7.72%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year63.77%
EBIT Next 3Y27.34%
EBIT Next 5Y18.85%
FCF growth 1Y-160.15%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-15.25%
OCF growth 3Y1.13%
OCF growth 5Y3.61%
ARCOS DORADOS HOLDINGS INC-A / ARCO FAQ
Can you provide the ChartMill fundamental rating for ARCOS DORADOS HOLDINGS INC-A?
ChartMill assigns a fundamental rating of 4 / 10 to ARCO.
What is the valuation status for ARCO stock?
ChartMill assigns a valuation rating of 6 / 10 to ARCOS DORADOS HOLDINGS INC-A (ARCO). This can be considered as Fairly Valued.
What is the profitability of ARCO stock?
ARCOS DORADOS HOLDINGS INC-A (ARCO) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for ARCO stock?
The Price/Earnings (PE) ratio for ARCOS DORADOS HOLDINGS INC-A (ARCO) is 11.39 and the Price/Book (PB) ratio is 2.56.
How sustainable is the dividend of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
The dividend rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 6 / 10 and the dividend payout ratio is 38.85%.