ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:ARCO • VGG0457F1071
8.18 USD
+0.04 (+0.49%)
At close: Jan 30, 2026
8.23 USD
+0.05 (+0.61%)
After Hours: 1/30/2026, 8:04:00 PM
ARCO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 132 industry peers in the Hotels, Restaurants & Leisure industry. There are concerns on the financial health of ARCO while its profitability can be described as average. ARCO has a decent growth rate and is not valued too expensively. Finally ARCO also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- ARCO had positive earnings in the past year.
- ARCO had a positive operating cash flow in the past year.
- ARCO had positive earnings in 4 of the past 5 years.
- ARCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 6.88%, ARCO is in the better half of the industry, outperforming 75.76% of the companies in the same industry.
- The Return On Equity of ARCO (32.94%) is better than 84.85% of its industry peers.
- With a decent Return On Invested Capital value of 7.78%, ARCO is doing good in the industry, outperforming 64.39% of the companies in the same industry.
- ARCO had an Average Return On Invested Capital over the past 3 years of 8.93%. This is in line with the industry average of 10.38%.
| 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
- ARCO's Profit Margin of 5.39% is in line compared to the rest of the industry. ARCO outperforms 59.09% of its industry peers.
- ARCO's Profit Margin has improved in the last couple of years.
- ARCO has a Operating Margin of 7.85%. This is comparable to the rest of the industry: ARCO outperforms 50.00% of its industry peers.
- ARCO's Operating Margin has improved in the last couple of years.
- The Gross Margin of ARCO (12.39%) is worse than 88.64% of its industry peers.
- In the last couple of years the Gross Margin of ARCO has grown nicely.
| 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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARCO is still creating some value.
- Compared to 1 year ago, ARCO has about the same amount of shares outstanding.
- ARCO has more shares outstanding than it did 5 years ago.
- ARCO has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 2.26 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
- ARCO's Altman-Z score of 2.26 is fine compared to the rest of the industry. ARCO outperforms 62.12% of its industry peers.
- The Debt to FCF ratio of ARCO is 383.76, which is on the high side as it means it would take ARCO, 383.76 years of fcf income to pay off all of its debts.
- ARCO's Debt to FCF ratio of 383.76 is on the low side compared to the rest of the industry. ARCO is outperformed by 61.36% of its industry peers.
- A Debt/Equity ratio of 1.32 is on the high side and indicates that ARCO has dependencies on debt financing.
- The Debt to Equity ratio of ARCO (1.32) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Altman-Z | 2.26 |
ROIC/WACC1.04
WACC7.51%
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 has a Current ratio (0.89) which is comparable to the rest of the industry.
- A Quick Ratio of 0.81 indicates that ARCO may have some problems paying its short term obligations.
- The Quick ratio of ARCO (0.81) is comparable to the rest of the industry.
| 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.
- Looking at the last year, ARCO shows a small growth in Revenue. The Revenue has grown by 1.21% in the last 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-21.73%
EPS Next 2Y-2.82%
EPS Next 3Y4.8%
EPS Next 5Y9.48%
Revenue Next Year3.64%
Revenue Next 2Y5.49%
Revenue Next 3Y5.95%
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
- With a Price/Earnings ratio of 14.35, ARCO is valued correctly.
- 82.58% of the companies in the same industry are more expensive than ARCO, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 28.32. ARCO is valued slightly cheaper when compared to this.
- A Price/Forward Earnings ratio of 12.03 indicates a correct valuation of ARCO.
- 82.58% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.35 | ||
| Fwd PE | 12.03 |
4.2 Price Multiples
- ARCO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ARCO is cheaper than 95.45% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, ARCO is valued a bit more expensive than 61.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 667.13 | ||
| EV/EBITDA | 4.36 |
4.3 Compensation for Growth
- ARCO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.26
EPS Next 2Y-2.82%
EPS Next 3Y4.8%
5. Dividend
5.1 Amount
- ARCO has a Yearly Dividend Yield of 2.95%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.25, ARCO pays a better dividend. On top of this ARCO pays more dividend than 84.85% 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 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
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
- 20.61% of the earnings are spent on dividend by ARCO. This is a low number and 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-2.82%
EPS Next 3Y4.8%
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 14.35 and the Price/Book (PB) ratio is 2.31.
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.