ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.39 USD
-0.09 (-1.2%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 132 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. Finally ARCO also has an excellent dividend rating.
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.
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
Looking at the Return On Assets, with a value of 6.88%, ARCO is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
ARCO has a better Return On Equity (32.94%) than 84.09% of its industry peers.
With a decent Return On Invested Capital value of 7.78%, ARCO is doing good in the industry, outperforming 62.88% of the companies in the same industry.
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 10.42%.
| 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 56.06% of its industry peers.
ARCO's Profit Margin has improved in the last couple of years.
ARCO has a Operating Margin (7.85%) which is in line with its industry peers.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO's Gross Margin of 12.39% is on the low side compared to the rest of the industry. ARCO is outperformed by 90.15% of its industry peers.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ARCO is creating some value.
ARCO has about the same amout of shares outstanding than it did 1 year ago.
ARCO has more shares outstanding than it did 5 years ago.
ARCO has a worse debt/assets ratio than last year.
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.
ARCO has a Altman-Z score of 2.23. This is in the better half of the industry: ARCO outperforms 61.36% of its industry peers.
The Debt to FCF ratio of ARCO is 383.76, which is on the high side as it means it would take ARCO, 383.76 years of fcf income to pay off all of its debts.
ARCO's Debt to FCF ratio of 383.76 is on the low side compared to the rest of the industry. ARCO is outperformed by 62.88% of its industry peers.
ARCO has a Debt/Equity ratio of 1.32. This is a high value indicating a heavy dependency on external financing.
ARCO has a Debt to Equity ratio (1.32) which 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/WACC0.99
WACC7.89%
2.3 Liquidity
A Current Ratio of 0.89 indicates that ARCO may have some problems paying its short term obligations.
The Current ratio of ARCO (0.89) is comparable to the rest of the industry.
A Quick Ratio of 0.81 indicates that ARCO may have some problems paying its short term obligations.
The Quick ratio of ARCO (0.81) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.89 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ARCO have decreased strongly by -18.57% 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.
The Revenue has been growing slightly by 1.21% in the past year.
The Revenue has been growing by 8.60% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 9.48% on average over the next years. This is quite good.
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-18.31%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
EPS Next 5Y9.48%
Revenue Next Year3.8%
Revenue Next 2Y5.56%
Revenue Next 3Y6.2%
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
Based on the Price/Earnings ratio of 12.96, the valuation of ARCO can be described as correct.
ARCO's Price/Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 81.82% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.56, ARCO is valued rather cheaply.
The Price/Forward Earnings ratio is 10.57, which indicates a very decent valuation of ARCO.
Based on the Price/Forward Earnings ratio, ARCO is valued cheaper than 87.12% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ARCO to the average of the S&P500 Index (23.79), we can say ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 10.57 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARCO is valued cheaper than 94.70% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ARCO is valued a bit more expensive than the industry average as 62.12% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 602.7 | ||
| EV/EBITDA | 4.09 |
4.3 Compensation for Growth
The decent profitability rating of ARCO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.14
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.23%, ARCO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.48, ARCO pays a better dividend. On top of this ARCO pays more dividend than 89.39% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, ARCO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
5.2 History
On average, the dividend of ARCO grows each year by 17.60%, which is quite nice.
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
20.61% 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.
DP20.61%
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
NYSE:ARCO (12/15/2025, 2:19:13 PM)
7.39
-0.09 (-1.2%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners48.65%
Inst Owner Change2.83%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.56B
Revenue(TTM)4.56B
Net Income(TTM)245.35M
Analysts81.43
Price Target9.82 (32.88%)
Short Float %2.41%
Short Ratio4.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.23% |
Yearly Dividend0.24
Dividend Growth(5Y)17.6%
DP20.61%
Div Incr Years2
Div Non Decr Years3
Ex-Date
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)-1.5%
PT rev (3m)-2.21%
EPS NQ rev (1m)-2.04%
EPS NQ rev (3m)-2.04%
EPS NY rev (1m)-3.43%
EPS NY rev (3m)-5.46%
Revenue NQ rev (1m)-3.45%
Revenue NQ rev (3m)-3.45%
Revenue NY rev (1m)-0.59%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 10.57 | ||
| P/S | 0.34 | ||
| P/FCF | 602.7 | ||
| P/OCF | 5.75 | ||
| P/B | 2.09 | ||
| P/tB | 2.6 | ||
| EV/EBITDA | 4.09 |
EPS(TTM)0.57
EY7.71%
EPS(NY)0.7
Fwd EY9.46%
FCF(TTM)0.01
FCFY0.17%
OCF(TTM)1.29
OCFY17.41%
SpS21.63
BVpS3.54
TBVpS2.84
PEG (NY)N/A
PEG (5Y)1.14
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
WACC7.89%
ROIC/WACC0.99
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-18.31%
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 Year3.8%
Revenue Next 2Y5.56%
Revenue Next 3Y6.2%
Revenue Next 5Y6.2%
EBIT growth 1Y17.91%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year64.67%
EBIT Next 3Y25.41%
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 for 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 12.96 and the Price/Book (PB) ratio is 2.09.
How sustainable is the dividend of ARCOS DORADOS HOLDINGS INC-A (ARCO) stock?
The dividend rating of ARCOS DORADOS HOLDINGS INC-A (ARCO) is 7 / 10 and the dividend payout ratio is 20.61%.