ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.8 USD
-0.08 (-1.02%)
7.8 USD
0 (0%)
Taking everything into account, ARCO scores 4 out of 10 in our fundamental rating. ARCO was compared to 133 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 correct valuation and a medium growth rate. ARCO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ARCO was profitable.
ARCO had a positive operating cash flow in the past year.
Of the past 5 years ARCO 4 years were profitable.
In the past 5 years ARCO always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 6.88%, ARCO is doing good in the industry, outperforming 75.94% of the companies in the same industry.
With an excellent Return On Equity value of 32.94%, ARCO belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.78%, ARCO is in the better half of the industry, outperforming 63.91% 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 10.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.88% | ||
| ROE | 32.94% | ||
| ROIC | 7.78% |
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
Looking at the Profit Margin, with a value of 5.39%, ARCO is in line with its industry, outperforming 59.40% of the companies in the same industry.
In the last couple of years the Profit Margin of ARCO has grown nicely.
The Operating Margin of ARCO (7.85%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO has a Gross Margin of 12.39%. This is amonst the worse of the industry: ARCO underperforms 88.72% of its industry peers.
ARCO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.85% | ||
| PM (TTM) | 5.39% | ||
| GM | 12.39% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ARCO is 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.
Compared to 1 year ago, ARCO has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.25 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARCO has a better Altman-Z score (2.25) than 62.41% of its industry peers.
ARCO has a debt to FCF ratio of 383.76. This is a negative value and a sign of low solvency as ARCO would need 383.76 years to pay back of all of its debts.
With a Debt to FCF ratio value of 383.76, ARCO is not doing good in the industry: 61.65% of the companies in the same industry are doing better.
A Debt/Equity ratio of 1.32 is on the high side and indicates that ARCO has dependencies on debt financing.
ARCO has a Debt to Equity ratio (1.32) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Altman-Z | 2.25 |
ROIC/WACC1.02
WACC7.63%
2.3 Liquidity
ARCO has a Current Ratio of 0.89. 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 0.89 is in line compared to the rest of the industry. ARCO outperforms 47.37% of its industry peers.
ARCO has a Quick Ratio of 0.89. 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 has a Quick ratio of 0.81. This is comparable to the rest of the industry: ARCO outperforms 46.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ARCO have decreased strongly by -18.57% in the last year.
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.
The Revenue has been growing slightly by 1.21% in the past year.
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)-18.57%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-29.41%
Revenue 1Y (TTM)1.21%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
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-17.55%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
EPS Next 5Y9.48%
Revenue Next Year3.75%
Revenue Next 2Y5.68%
Revenue Next 3Y6.2%
Revenue Next 5Y6.2%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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 13.68 indicates a correct valuation of ARCO.
ARCO's Price/Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 83.46% of the companies in the same industry.
ARCO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 11.15, the valuation of ARCO can be described as reasonable.
87.22% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ARCO to the average of the S&P500 Index (24.04), we can say ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.68 | ||
| Fwd PE | 11.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaply inside the industry as 95.49% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARCO indicates a slightly more expensive valuation: ARCO is more expensive than 61.65% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 636.14 | ||
| EV/EBITDA | 4.25 |
4.3 Compensation for Growth
The decent profitability rating of ARCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.2
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.03%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.32, ARCO pays a better dividend. On top of this ARCO pays more dividend than 87.22% of the companies listed in the same industry.
ARCO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
5.2 History
The dividend of ARCO is nicely growing with an annual growth rate of 17.60%!
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
ARCO pays out 20.61% of its income as dividend. This is a sustainable payout ratio.
ARCO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP20.61%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
7.8
-0.08 (-1.02%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners48.76%
Inst Owner Change-0.91%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.64B
Revenue(TTM)4.56B
Net Income(TTM)245.35M
Analysts81.43
Price Target9.84 (26.15%)
Short Float %2.39%
Short Ratio4.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
Yearly Dividend0.24
Dividend Growth(5Y)17.6%
DP20.61%
Div Incr Years2
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)9.18%
Min EPS beat(2)-9.5%
Max EPS beat(2)27.87%
EPS beat(4)2
Avg EPS beat(4)1.68%
Min EPS beat(4)-40.32%
Max EPS beat(4)28.68%
EPS beat(8)3
Avg EPS beat(8)-3.98%
EPS beat(12)6
Avg EPS beat(12)2.22%
EPS beat(16)9
Avg EPS beat(16)15.63%
Revenue beat(2)0
Avg Revenue beat(2)-2.7%
Min Revenue beat(2)-3.88%
Max Revenue beat(2)-1.53%
Revenue beat(4)1
Avg Revenue beat(4)-2.01%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)0.15%
Revenue beat(8)4
Avg Revenue beat(8)-0.22%
Revenue beat(12)7
Avg Revenue beat(12)-0.09%
Revenue beat(16)10
Avg Revenue beat(16)0.8%
PT rev (1m)0.26%
PT rev (3m)-3.36%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.04%
EPS NY rev (1m)0.92%
EPS NY rev (3m)-4.79%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.45%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.68 | ||
| Fwd PE | 11.15 | ||
| P/S | 0.36 | ||
| P/FCF | 636.14 | ||
| P/OCF | 6.06 | ||
| P/B | 2.21 | ||
| P/tB | 2.74 | ||
| EV/EBITDA | 4.25 |
EPS(TTM)0.57
EY7.31%
EPS(NY)0.7
Fwd EY8.97%
FCF(TTM)0.01
FCFY0.16%
OCF(TTM)1.29
OCFY16.49%
SpS21.63
BVpS3.54
TBVpS2.84
PEG (NY)N/A
PEG (5Y)1.2
Graham Number6.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.88% | ||
| ROE | 32.94% | ||
| ROCE | 12.62% | ||
| ROIC | 7.78% | ||
| ROICexc | 8.55% | ||
| ROICexgc | 9.07% | ||
| OM | 7.85% | ||
| PM (TTM) | 5.39% | ||
| GM | 12.39% | ||
| FCFM | 0.06% |
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-Score5
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Debt/EBITDA | 1.8 | ||
| Cap/Depr | 142.32% | ||
| Cap/Sales | 5.89% | ||
| Interest Coverage | 5.16 | ||
| Cash Conversion | 49.6% | ||
| Profit Quality | 1.05% | ||
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 2.25 |
F-Score5
WACC7.63%
ROIC/WACC1.02
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)-18.57%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-29.41%
EPS Next Y-17.55%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
EPS Next 5Y9.48%
Revenue 1Y (TTM)1.21%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%5.22%
Revenue Next Year3.75%
Revenue Next 2Y5.68%
Revenue Next 3Y6.2%
Revenue Next 5Y6.2%
EBIT growth 1Y17.91%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year67.24%
EBIT Next 3Y24.86%
EBIT Next 5Y18.85%
FCF growth 1Y-87.93%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-20.84%
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 of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
ChartMill assigns a valuation rating of 5 / 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 13.68 and the Price/Book (PB) ratio is 2.21.
What is the financial health of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
The financial health rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 2 / 10.