ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.53 USD
-0.06 (-0.79%)
7.4 USD
-0.13 (-1.73%)
ARCO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 133 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 is not valued too expensively and it also shows a decent 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.
- Each year in the past 5 years ARCO had a positive operating cash flow.
1.2 Ratios
- ARCO has a better Return On Assets (6.88%) than 75.94% of its industry peers.
- Looking at the Return On Equity, with a value of 32.94%, ARCO belongs to the top of the industry, outperforming 84.21% of the companies in the same industry.
- The Return On Invested Capital of ARCO (7.78%) is better than 63.91% of its industry peers.
- 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 10.34%.
| 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
- ARCO's Profit Margin of 5.39% is in line compared to the rest of the industry. ARCO outperforms 59.40% of its industry peers.
- ARCO's Profit Margin has improved in the last couple of years.
- ARCO's Operating Margin of 7.85% is in line compared to the rest of the industry. ARCO outperforms 49.62% of its industry peers.
- In the last couple of years the Operating Margin of ARCO has grown nicely.
- Looking at the Gross Margin, with a value of 12.39%, ARCO is doing worse than 88.72% of the companies in the same industry.
- 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
- 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.
- The debt/assets ratio for ARCO is higher compared to a year ago.
2.2 Solvency
- ARCO has an Altman-Z score of 2.23. 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.
- The Altman-Z score of ARCO (2.23) is better than 61.65% 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.
- Looking at the Debt to FCF ratio, with a value of 383.76, ARCO is doing worse than 61.65% of the companies in the same industry.
- 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 | 2.23 |
ROIC/WACC1.01
WACC7.7%
2.3 Liquidity
- A Current Ratio of 0.89 indicates that ARCO may have some problems paying its short term obligations.
- ARCO has a Current ratio (0.89) which is comparable to the rest of the industry.
- 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
- ARCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.57%.
- 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 1.21%.
- ARCO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.60% yearly.
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
- 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.
- 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 Year3.64%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 13.21, the valuation of ARCO can be described as correct.
- Based on the Price/Earnings ratio, ARCO is valued cheaply inside the industry as 83.46% of the companies are valued more expensively.
- ARCO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.38.
- With a Price/Forward Earnings ratio of 10.77, the valuation of ARCO can be described as very reasonable.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 87.97% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.29, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.21 | ||
| Fwd PE | 10.77 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ARCO indicates a rather cheap valuation: ARCO is cheaper than 95.49% of the companies listed in the same industry.
- 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 | 614.12 | ||
| EV/EBITDA | 4.11 |
4.3 Compensation for Growth
- The decent profitability rating of ARCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.16
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
5. Dividend
5.1 Amount
- ARCO has a Yearly Dividend Yield of 3.16%.
- ARCO's Dividend Yield is rather good when compared to the industry average which is at 1.19. ARCO pays more dividend than 88.72% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.84, ARCO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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.
- The dividend of ARCO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP20.61%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
7.53
-0.06 (-0.79%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)11-12 2025-11-12/bmo
Earnings (Next)03-10 2026-03-10/amc
Inst Owners48.76%
Inst Owner Change-0.92%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.59B
Revenue(TTM)4.56B
Net Income(TTM)245.35M
Analysts81.43
Price Target9.84 (30.68%)
Short Float %2.29%
Short Ratio4.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.16% |
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)-0.15%
Revenue NY rev (3m)-0.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.21 | ||
| Fwd PE | 10.77 | ||
| P/S | 0.35 | ||
| P/FCF | 614.12 | ||
| P/OCF | 5.85 | ||
| P/B | 2.13 | ||
| P/tB | 2.65 | ||
| EV/EBITDA | 4.11 |
EPS(TTM)0.57
EY7.57%
EPS(NY)0.7
Fwd EY9.29%
FCF(TTM)0.01
FCFY0.16%
OCF(TTM)1.29
OCFY17.08%
SpS21.63
BVpS3.54
TBVpS2.84
PEG (NY)N/A
PEG (5Y)1.16
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 | 2.23 |
F-Score5
WACC7.7%
ROIC/WACC1.01
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 Year3.64%
Revenue Next 2Y5.49%
Revenue Next 3Y5.95%
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 13.21 and the Price/Book (PB) ratio is 2.13.
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.