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

NYSE:ARCO • VGG0457F1071

Current stock price

8.53 USD
-0.19 (-2.18%)
Last:

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.
  • In the past 5 years ARCO always reported a positive cash flow from operatings.
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

  • ARCO's Return On Assets of 10.27% is amongst the best of the industry. ARCO outperforms 84.13% of its industry peers.
  • ARCO has a Return On Equity of 51.79%. This is amongst the best in the industry. ARCO outperforms 91.27% of its industry peers.
  • ARCO has a Return On Invested Capital of 12.14%. This is in the better half of the industry: ARCO outperforms 75.40% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for ARCO is below the industry average of 10.55%.
  • 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

  • ARCO has a Profit Margin (4.93%) which is in line with its industry peers.
  • ARCO's Profit Margin has improved in the last couple of years.
  • With a Operating Margin value of 7.65%, ARCO perfoms like the industry average, outperforming 46.83% of the companies in the same industry.
  • ARCO's Operating Margin has improved in the last couple of years.
  • ARCO has a worse Gross Margin (11.96%) than 91.27% of its industry peers.
  • In the last couple of years the Gross Margin of ARCO has declined.
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

  • 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 has been increased compared to 1 year ago.
  • ARCO has more shares outstanding than it did 5 years ago.
  • ARCO has a worse debt/assets ratio than last year.
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 3.27. This indicates that ARCO is financially healthy and has little risk of bankruptcy at the moment.
  • ARCO has a better Altman-Z score (3.27) than 79.37% of its industry peers.
  • 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.
  • The Debt to FCF ratio of ARCO (75.87) is worse than 63.49% 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.
  • Looking at the Debt to Equity ratio, with a value of 1.46, ARCO is in line with its industry, outperforming 51.59% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.46
Debt/FCF 75.87
Altman-Z 3.27
ROIC/WACC1.7
WACC7.15%
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

  • ARCO has a Current Ratio of 1.03. This is a normal value and indicates that ARCO is financially healthy and should not expect problems in meeting its short term obligations.
  • ARCO has a Current ratio of 1.03. This is comparable to the rest of the industry: ARCO outperforms 52.38% of 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 in line with its industry peers.
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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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. ARCO Growth Analysis

3.1 Past

  • The earnings per share for ARCO have decreased strongly by -43.06% in the last year.
  • The earnings per share for ARCO have been decreasing by -15.52% on average. This is quite bad
  • The Revenue has grown by 80.98% in the past year. This is a very strong growth!
  • ARCO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 18.71% yearly.
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

  • ARCO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 28.91% yearly.
  • 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 Y62.95%
EPS Next 2Y42.83%
EPS Next 3Y31.79%
EPS Next 5Y28.91%
Revenue Next Year10%
Revenue Next 2Y7.09%
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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7

4. ARCO Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 20.80 indicates a rather expensive valuation of ARCO.
  • Based on the Price/Earnings ratio, ARCO is valued a bit cheaper than 63.49% of the companies in the same industry.
  • ARCO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.33, which is the current average of the S&P500 Index.
  • With a Price/Forward Earnings ratio of 12.77, ARCO is valued correctly.
  • Based on the Price/Forward Earnings ratio, ARCO is valued cheaper than 80.16% of the companies in the same industry.
  • When comparing the Price/Forward Earnings ratio of ARCO to the average of the S&P500 Index (38.16), we can say ARCO is valued rather cheaply.
Industry RankSector Rank
PE 20.8
Fwd PE 12.77
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 119.84
EV/EBITDA 3.07
ARCO Per share dataARCO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

  • ARCO's 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)0.33
PEG (5Y)N/A
EPS Next 2Y42.83%
EPS Next 3Y31.79%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. ARCO Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 3.28%, ARCO has a reasonable but not impressive dividend return.
  • Compared to an average industry Dividend Yield of 1.09, ARCO pays a better dividend. On top of this ARCO pays more dividend than 88.89% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.82, ARCO pays a better dividend.
Industry RankSector Rank
Dividend Yield 3.28%

5.2 History

  • On average, the dividend of ARCO grows each year by 37.50%, which is quite nice.
  • 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)37.5%
Div Incr Years0
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.
  • ARCO's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP12.67%
EPS Next 2Y42.83%
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 (4/15/2026, 3:26:49 PM)

8.53

-0.19 (-2.18%)

Chartmill FA Rating
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)03-19
Earnings (Next)05-12
Inst Owners50.59%
Inst Owner Change0.11%
Ins Owners4.55%
Ins Owner Change0%
Market Cap1.80B
Revenue(TTM)8.09B
Net Income(TTM)399.06M
Analysts81.43
Price Target10.45 (22.51%)
Short Float %1.52%
Short Ratio2.24
Dividend
Industry RankSector Rank
Dividend Yield 3.28%
Yearly Dividend0.24
Dividend Growth(5Y)37.5%
DP12.67%
Div Incr Years0
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)-3.91%
EPS NY rev (3m)-4.48%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.49%
Revenue NY rev (1m)0.21%
Revenue NY rev (3m)2.29%
Valuation
Industry RankSector Rank
PE 20.8
Fwd PE 12.77
P/S 0.22
P/FCF 119.84
P/OCF 6.06
P/B 2.33
P/tB 2.89
EV/EBITDA 3.07
EPS(TTM)0.41
EY4.81%
EPS(NY)0.67
Fwd EY7.83%
FCF(TTM)0.07
FCFY0.83%
OCF(TTM)1.41
OCFY16.49%
SpS38.4
BVpS3.66
TBVpS2.95
PEG (NY)0.33
PEG (5Y)N/A
Graham Number5.80866 (-31.9%)
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 3.27
F-Score5
WACC7.15%
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 Y62.95%
EPS Next 2Y42.83%
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 Year10%
Revenue Next 2Y7.09%
Revenue Next 3Y6.92%
Revenue Next 5Y6.79%
EBIT growth 1Y90.8%
EBIT growth 3Y11.1%
EBIT growth 5YN/A
EBIT Next Year64.98%
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 7 / 10 to ARCOS DORADOS HOLDINGS INC-A (ARCO). This can be considered as Undervalued.


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 62.95% 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%.