ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - NYSE:ARCO - VGG0457F1071 - Common Stock
7.2 USD
-0.02 (-0.28%)
7.2 USD
0 (0%)
Overall ARCO gets a fundamental rating of 4 out of 10. We evaluated ARCO against 134 industry peers in the Hotels, Restaurants & Leisure industry. While ARCO is still in line with the averages on profitability rating, there are concerns on its financial health. ARCO has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year ARCO was profitable.
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
With a Return On Assets value of 3.86%, ARCO perfoms like the industry average, outperforming 58.21% of the companies in the same industry.
ARCO's Return On Equity of 22.43% is amongst the best of the industry. ARCO outperforms 82.09% of its industry peers.
ARCO has a Return On Invested Capital (6.82%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years 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.
ARCO's Profit Margin has improved in the last couple of years.
The Operating Margin of ARCO (6.46%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO's Gross Margin of 12.53% is on the low side compared to the rest of the industry. ARCO is outperformed by 89.55% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ARCO is still creating some value.
ARCO has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, ARCO has more shares outstanding
The debt/assets ratio for ARCO is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.16 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARCO has a Altman-Z score (2.16) which is in line with its industry peers.
ARCO has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.68, ARCO perfoms like the industry average, outperforming 54.48% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.16 |
ROIC/WACC0.91
WACC7.51%
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.
ARCO has a Quick Ratio of 0.80. This is a bad value and indicates that ARCO is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.73, ARCO is in line with its industry, outperforming 41.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.73 |
3. Growth
3.1 Past
The earnings per share for ARCO have decreased strongly by -23.46% 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.
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
ARCO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.48% yearly.
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-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.
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
The Price/Earnings ratio is 11.61, which indicates a very decent valuation of ARCO.
Based on the Price/Earnings ratio, ARCO is valued cheaper than 90.30% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.91, ARCO is valued rather cheaply.
The Price/Forward Earnings ratio is 9.60, which indicates a very decent valuation of ARCO.
89.55% of the companies in the same industry are more expensive than ARCO, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.92. ARCO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.61 | ||
| Fwd PE | 9.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaper than 94.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.54 |
4.3 Compensation for Growth
The decent profitability rating of ARCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.02
EPS Next 2Y2.04%
EPS Next 3Y8.84%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.32%, ARCO has a reasonable but not impressive dividend return.
ARCO's Dividend Yield is rather good when compared to the industry average which is at 3.84. ARCO pays more dividend than 86.57% of the companies in the same industry.
ARCO's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
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
38.85% 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.
DP38.85%
EPS Next 2Y2.04%
EPS Next 3Y8.84%
7.2
-0.02 (-0.28%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners43.24%
Inst Owner Change-0.08%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.52B
Revenue(TTM)4.50B
Net Income(TTM)130.13M
Analysts81.43
Price Target10.19 (41.53%)
Short Float %2.26%
Short Ratio3.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.32% |
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)1.45%
PT rev (3m)-1.96%
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 | 11.61 | ||
| Fwd PE | 9.6 | ||
| P/S | 0.34 | ||
| P/FCF | N/A | ||
| P/OCF | 5.81 | ||
| P/B | 2.61 | ||
| P/tB | 3.48 | ||
| EV/EBITDA | 4.54 |
EPS(TTM)0.62
EY8.61%
EPS(NY)0.75
Fwd EY10.41%
FCF(TTM)-0.1
FCFYN/A
OCF(TTM)1.24
OCFY17.2%
SpS21.35
BVpS2.75
TBVpS2.07
PEG (NY)N/A
PEG (5Y)1.02
Graham Number6.2
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
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-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 | 2.16 |
F-Score4
WACC7.51%
ROIC/WACC0.91
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%
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 for ARCO stock?
ChartMill assigns a valuation rating of 6 / 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 11.61 and the Price/Book (PB) ratio is 2.61.
How sustainable is the dividend of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
The dividend rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 6 / 10 and the dividend payout ratio is 38.85%.