ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - NYSE:ARCO - VGG0457F1071 - Common Stock
7 USD
-0.07 (-0.99%)
7 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 135 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.
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.
Of the past 5 years ARCO 4 years were profitable.
ARCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ARCO's Return On Assets of 3.86% is in line compared to the rest of the industry. ARCO outperforms 58.52% of its industry peers.
With an excellent Return On Equity value of 22.43%, ARCO belongs to the best of the industry, outperforming 82.22% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.82%, ARCO is in line with its industry, outperforming 58.52% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARCO is in line with the industry average of 10.67%.
| 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 (2.89%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of ARCO has grown nicely.
ARCO has a Operating Margin (6.46%) which 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 12.53%. This is amonst the worse of the industry: ARCO underperforms 89.63% of its industry peers.
In the last couple of years the Gross Margin of ARCO has grown nicely.
| 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
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.
The debt/assets ratio for ARCO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.15 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARCO's Altman-Z score of 2.15 is in line compared to the rest of the industry. ARCO outperforms 57.78% of its industry peers.
ARCO has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
ARCO's Debt to Equity ratio of 1.68 is in line compared to the rest of the industry. ARCO outperforms 54.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.15 |
ROIC/WACC0.92
WACC7.44%
2.3 Liquidity
A Current Ratio of 0.80 indicates that ARCO may have some problems paying its short term obligations.
ARCO has a Current ratio (0.80) which is in line with its industry peers.
A Quick Ratio of 0.73 indicates that ARCO may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.73, ARCO is in line with its industry, outperforming 41.48% of the companies in the same industry.
| 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%.
ARCO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.38% yearly.
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
Based on estimates for the next years, ARCO will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.48% on average per year.
ARCO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.20% yearly.
EPS Next Y-13.41%
EPS Next 2Y2.04%
EPS Next 3Y8.84%
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
Based on the Price/Earnings ratio of 11.29, the valuation of ARCO can be described as reasonable.
Based on the Price/Earnings ratio, ARCO is valued cheaply inside the industry as 88.89% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of ARCO to the average of the S&P500 Index (27.40), we can say ARCO is valued rather cheaply.
ARCO is valuated reasonably with a Price/Forward Earnings ratio of 9.34.
ARCO's Price/Forward Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 90.37% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARCO to the average of the S&P500 Index (22.94), we can say ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.29 | ||
| Fwd PE | 9.34 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaply inside the industry as 94.07% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.47 |
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)0.99
EPS Next 2Y2.04%
EPS Next 3Y8.84%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.48%.
ARCO's Dividend Yield is rather good when compared to the industry average which is at 6.99. ARCO pays more dividend than 86.67% of the companies in the same industry.
ARCO's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
5.2 History
The dividend of ARCO is nicely growing with an annual growth rate of 17.60%!
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)17.6%
Div Incr Years2
Div Non Decr Years3
5.3 Sustainability
ARCO pays out 38.85% 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.
DP38.85%
EPS Next 2Y2.04%
EPS Next 3Y8.84%
7
-0.07 (-0.99%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners43.24%
Inst Owner Change-0.04%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.47B
Analysts81.43
Price Target10.19 (45.57%)
Short Float %2.01%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
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)-1.27%
PT rev (3m)-4.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0.2%
EPS NY rev (3m)-1.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)0.34%
Revenue NY rev (3m)0.36%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.29 | ||
| Fwd PE | 9.34 | ||
| P/S | 0.33 | ||
| P/FCF | N/A | ||
| P/OCF | 5.65 | ||
| P/B | 2.54 | ||
| P/tB | 3.38 | ||
| EV/EBITDA | 4.47 |
EPS(TTM)0.62
EY8.86%
EPS(NY)0.75
Fwd EY10.71%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY17.69%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)0.99
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
ROICexcg growth 3Y20.8%
ROICexcg 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
WACC7.44%
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-13.41%
EPS Next 2Y2.04%
EPS Next 3Y8.84%
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%