ARCOS DORADOS HOLDINGS INC-A (ARCO) Fundamental Analysis & Valuation

NYSE:ARCO • VGG0457F1071

Current stock price

8.35 USD
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This ARCO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

6

1. ARCO Profitability Analysis

1.1 Basic Checks

  • ARCO had positive earnings in the past year.
  • ARCO had a positive operating cash flow in the past year.
  • In the past 5 years ARCO has always been profitable.
  • Each year in the past 5 years ARCO had a positive operating cash flow.
ARCO Yearly Net Income VS EBIT VS OCF VS FCFARCO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 100M -100M 200M 300M

1.2 Ratios

  • With an excellent Return On Assets value of 10.27%, ARCO belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
  • Looking at the Return On Equity, with a value of 51.79%, ARCO belongs to the top of the industry, outperforming 91.27% of the companies in the same industry.
  • ARCO has a better Return On Invested Capital (12.14%) than 75.40% of its industry peers.
  • ARCO had an Average Return On Invested Capital over the past 3 years of 8.24%. This is below the industry average of 10.68%.
  • The last Return On Invested Capital (12.14%) for ARCO is above the 3 year average (8.24%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 10.27%
ROE 51.79%
ROIC 12.14%
ROA(3y)5.54%
ROA(5y)4.77%
ROE(3y)30.66%
ROE(5y)31.2%
ROIC(3y)8.24%
ROIC(5y)7.55%
ARCO Yearly ROA, ROE, ROICARCO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40 -40 -60

1.3 Margins

  • The Profit Margin of ARCO (4.93%) is comparable to the rest of the industry.
  • ARCO's Profit Margin has improved in the last couple of years.
  • Looking at the Operating Margin, with a value of 7.65%, ARCO is in line with its industry, outperforming 46.03% of the companies in the same industry.
  • In the last couple of years the Operating Margin of ARCO has grown nicely.
  • ARCO's Gross Margin of 11.96% is on the low side compared to the rest of the industry. ARCO is outperformed by 91.27% of its industry peers.
  • ARCO's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 7.65%
PM (TTM) 4.93%
GM 11.96%
OM growth 3Y1.99%
OM growth 5YN/A
PM growth 3Y5.36%
PM growth 5YN/A
GM growth 3Y-20.83%
GM growth 5Y-6.17%
ARCO Yearly Profit, Operating, Gross MarginsARCO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10 20

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3

2. ARCO Health Analysis

2.1 Basic Checks

  • ARCO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
  • The number of shares outstanding for ARCO has been increased compared to 1 year ago.
  • The number of shares outstanding for ARCO has been increased compared to 5 years ago.
  • Compared to 1 year ago, ARCO has a worse debt to assets ratio.
ARCO Yearly Shares OutstandingARCO Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50M 100M 150M 200M
ARCO Yearly Total Debt VS Total AssetsARCO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B

2.2 Solvency

  • ARCO has an Altman-Z score of 3.25. This indicates that ARCO is financially healthy and has little risk of bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 3.25, ARCO belongs to the top of the industry, outperforming 80.16% of the companies in the same industry.
  • The Debt to FCF ratio of ARCO is 75.87, which is on the high side as it means it would take ARCO, 75.87 years of fcf income to pay off all of its debts.
  • ARCO's Debt to FCF ratio of 75.87 is on the low side compared to the rest of the industry. ARCO is outperformed by 62.70% of its industry peers.
  • A Debt/Equity ratio of 1.46 is on the high side and indicates that ARCO has dependencies on debt financing.
  • ARCO's Debt to Equity ratio of 1.46 is in line compared to the rest of the industry. ARCO outperforms 50.79% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.46
Debt/FCF 75.87
Altman-Z 3.25
ROIC/WACC1.7
WACC7.13%
ARCO Yearly LT Debt VS Equity VS FCFARCO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M 400M 600M 800M 1B

2.3 Liquidity

  • A Current Ratio of 1.03 indicates that ARCO should not have too much problems paying its short term obligations.
  • ARCO has a Current ratio (1.03) which is in line with its industry peers.
  • A Quick Ratio of 0.95 indicates that ARCO may have some problems paying its short term obligations.
  • ARCO has a Quick ratio (0.95) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 1.03
Quick Ratio 0.95
ARCO Yearly Current Assets VS Current LiabilitesARCO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M

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5

3. ARCO Growth Analysis

3.1 Past

  • ARCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -43.06%.
  • Measured over the past years, ARCO shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -15.52% on average per year.
  • ARCO shows a strong growth in Revenue. In the last year, the Revenue has grown by 80.98%.
  • The Revenue has been growing by 18.71% on average over the past years. This is quite good.
EPS 1Y (TTM)-43.06%
EPS 3Y-15.52%
EPS 5YN/A
EPS Q2Q%-57.14%
Revenue 1Y (TTM)80.98%
Revenue growth 3Y8.94%
Revenue growth 5Y18.71%
Sales Q2Q%10.88%

3.2 Future

  • Based on estimates for the next years, ARCO will show a very strong growth in Earnings Per Share. The EPS will grow by 28.91% on average per year.
  • Based on estimates for the next years, ARCO will show a small growth in Revenue. The Revenue will grow by 6.79% on average per year.
EPS Next Y69.59%
EPS Next 2Y43.48%
EPS Next 3Y31.79%
EPS Next 5Y28.91%
Revenue Next Year9.77%
Revenue Next 2Y8.17%
Revenue Next 3Y6.92%
Revenue Next 5Y6.79%

3.3 Evolution

  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
ARCO Yearly Revenue VS EstimatesARCO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2B 4B 6B
ARCO Yearly EPS VS EstimatesARCO Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0 0.5 -0.5 1

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6

4. ARCO Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 20.37, ARCO is valued on the expensive side.
  • Based on the Price/Earnings ratio, ARCO is valued a bit cheaper than 64.29% of the companies in the same industry.
  • ARCO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.60.
  • The Price/Forward Earnings ratio is 12.01, which indicates a correct valuation of ARCO.
  • ARCO's Price/Forward Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 80.16% of the companies in the same industry.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 22.84, ARCO is valued a bit cheaper.
Industry RankSector Rank
PE 20.37
Fwd PE 12.01
ARCO Price Earnings VS Forward Price EarningsARCO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • 96.03% of the companies in the same industry are more expensive than ARCO, based on the Enterprise Value to EBITDA ratio.
  • ARCO's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 117.31
EV/EBITDA 2.97
ARCO Per share dataARCO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

  • The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • The decent profitability rating of ARCO may justify a higher PE ratio.
  • A more expensive valuation may be justified as ARCO's earnings are expected to grow with 31.79% in the coming years.
PEG (NY)0.29
PEG (5Y)N/A
EPS Next 2Y43.48%
EPS Next 3Y31.79%

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7

5. ARCO Dividend Analysis

5.1 Amount

  • ARCO has a Yearly Dividend Yield of 3.47%.
  • Compared to an average industry Dividend Yield of 1.11, ARCO pays a better dividend. On top of this ARCO pays more dividend than 88.10% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.88, ARCO pays a better dividend.
Industry RankSector Rank
Dividend Yield 3.47%

5.2 History

  • The dividend of ARCO is nicely growing with an annual growth rate of 37.50%!
  • ARCO has paid a dividend for at least 10 years, which is a reliable track record.
  • ARCO has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)37.5%
Div Incr Years2
Div Non Decr Years3
ARCO Yearly Dividends per shareARCO Yearly Dividends per shareYearly Dividends per share 2018 2019 2020 2022 2023 2024 2025 2026 0.05 0.1 0.15 0.2

5.3 Sustainability

  • ARCO pays out 12.67% of its income as dividend. This is a sustainable payout ratio.
  • The dividend of ARCO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP12.67%
EPS Next 2Y43.48%
EPS Next 3Y31.79%
ARCO Yearly Income VS Free CF VS DividendARCO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 100M -100M 200M
ARCO Dividend Payout.ARCO Dividend Payout, showing the Payout Ratio.ARCO Dividend Payout.PayoutRetained Earnings

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ARCO Fundamentals: All Metrics, Ratios and Statistics

ARCOS DORADOS HOLDINGS INC-A

NYSE:ARCO (4/2/2026, 8:08:19 PM)

After market: 8.35 0 (0%)

8.35

0 (0%)

Chartmill FA Rating
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)03-19
Earnings (Next)05-12
Inst Owners50.3%
Inst Owner Change-10.52%
Ins Owners4.55%
Ins Owner Change0%
Market Cap1.76B
Revenue(TTM)8.09B
Net Income(TTM)399.06M
Analysts81.43
Price Target10.45 (25.15%)
Short Float %1.9%
Short Ratio2.53
Dividend
Industry RankSector Rank
Dividend Yield 3.47%
Yearly Dividend0.24
Dividend Growth(5Y)37.5%
DP12.67%
Div Incr Years2
Div Non Decr Years3
Ex-Date06-22
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-25.34%
Min EPS beat(2)-41.18%
Max EPS beat(2)-9.5%
EPS beat(4)1
Avg EPS beat(4)-15.78%
Min EPS beat(4)-41.18%
Max EPS beat(4)27.87%
EPS beat(8)3
Avg EPS beat(8)-6.74%
EPS beat(12)5
Avg EPS beat(12)-2.12%
EPS beat(16)8
Avg EPS beat(16)10.7%
Revenue beat(2)1
Avg Revenue beat(2)-1.92%
Min Revenue beat(2)-3.88%
Max Revenue beat(2)0.04%
Revenue beat(4)2
Avg Revenue beat(4)-1.3%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)0.15%
Revenue beat(8)4
Avg Revenue beat(8)-0.24%
Revenue beat(12)7
Avg Revenue beat(12)-0.16%
Revenue beat(16)10
Avg Revenue beat(16)0.7%
PT rev (1m)0%
PT rev (3m)6.14%
EPS NQ rev (1m)0%
EPS NQ rev (3m)18.18%
EPS NY rev (1m)2.25%
EPS NY rev (3m)-0.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.49%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.07%
Valuation
Industry RankSector Rank
PE 20.37
Fwd PE 12.01
P/S 0.22
P/FCF 117.31
P/OCF 5.94
P/B 2.28
P/tB 2.83
EV/EBITDA 2.97
EPS(TTM)0.41
EY4.91%
EPS(NY)0.7
Fwd EY8.33%
FCF(TTM)0.07
FCFY0.85%
OCF(TTM)1.41
OCFY16.85%
SpS38.4
BVpS3.66
TBVpS2.95
PEG (NY)0.29
PEG (5Y)N/A
Graham Number5.81
Profitability
Industry RankSector Rank
ROA 10.27%
ROE 51.79%
ROCE 20.25%
ROIC 12.14%
ROICexc 14.09%
ROICexgc 14.93%
OM 7.65%
PM (TTM) 4.93%
GM 11.96%
FCFM 0.19%
ROA(3y)5.54%
ROA(5y)4.77%
ROE(3y)30.66%
ROE(5y)31.2%
ROIC(3y)8.24%
ROIC(5y)7.55%
ROICexc(3y)9.19%
ROICexc(5y)8.62%
ROICexgc(3y)9.58%
ROICexgc(5y)8.95%
ROCE(3y)13.95%
ROCE(5y)12.71%
ROICexgc growth 3Y-5.73%
ROICexgc growth 5YN/A
ROICexc growth 3Y-6.45%
ROICexc growth 5YN/A
OM growth 3Y1.99%
OM growth 5YN/A
PM growth 3Y5.36%
PM growth 5YN/A
GM growth 3Y-20.83%
GM growth 5Y-6.17%
F-Score5
Asset Turnover2.08
Health
Industry RankSector Rank
Debt/Equity 1.46
Debt/FCF 75.87
Debt/EBITDA 1.38
Cap/Depr 142.63%
Cap/Sales 3.48%
Interest Coverage 10.43
Cash Conversion 36.3%
Profit Quality 3.76%
Current Ratio 1.03
Quick Ratio 0.95
Altman-Z 3.25
F-Score5
WACC7.13%
ROIC/WACC1.7
Cap/Depr(3y)189.54%
Cap/Depr(5y)169.07%
Cap/Sales(3y)7.22%
Cap/Sales(5y)6.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-43.06%
EPS 3Y-15.52%
EPS 5YN/A
EPS Q2Q%-57.14%
EPS Next Y69.59%
EPS Next 2Y43.48%
EPS Next 3Y31.79%
EPS Next 5Y28.91%
Revenue 1Y (TTM)80.98%
Revenue growth 3Y8.94%
Revenue growth 5Y18.71%
Sales Q2Q%10.88%
Revenue Next Year9.77%
Revenue Next 2Y8.17%
Revenue Next 3Y6.92%
Revenue Next 5Y6.79%
EBIT growth 1Y90.8%
EBIT growth 3Y11.1%
EBIT growth 5YN/A
EBIT Next Year67.45%
EBIT Next 3Y26.49%
EBIT Next 5Y22.32%
FCF growth 1Y124.67%
FCF growth 3Y-51.11%
FCF growth 5YN/A
OCF growth 1Y11.05%
OCF growth 3Y-4.98%
OCF growth 5Y79.28%

ARCOS DORADOS HOLDINGS INC-A / ARCO Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for ARCOS DORADOS HOLDINGS INC-A?

ChartMill assigns a fundamental rating of 5 / 10 to ARCO.


What is the valuation status of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?

ChartMill assigns a valuation rating of 6 / 10 to ARCOS DORADOS HOLDINGS INC-A (ARCO). This can be considered as Fairly Valued.


How profitable is ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?

ARCOS DORADOS HOLDINGS INC-A (ARCO) has a profitability rating of 6 / 10.


What is the earnings growth outlook for ARCOS DORADOS HOLDINGS INC-A?

The Earnings per Share (EPS) of ARCOS DORADOS HOLDINGS INC-A (ARCO) is expected to grow by 69.59% in the next year.


Is the dividend of ARCOS DORADOS HOLDINGS INC-A sustainable?

The dividend rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 7 / 10 and the dividend payout ratio is 12.67%.