ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
NYSE:ARCO - New York Stock Exchange, Inc. - VGG0457F1071 - Common Stock - Currency: USD
ARCO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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
ARCO had positive earnings in the past year.
In the past year ARCO had a positive cash flow from operations.
ARCO had positive earnings in 4 of the past 5 years.
Each year in the past 5 years ARCO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of ARCO (5.14%) is better than 71.11% of its industry peers.
Looking at the Return On Equity, with a value of 29.28%, ARCO belongs to the top of the industry, outperforming 83.70% of the companies in the same industry.
With a decent Return On Invested Capital value of 9.14%, ARCO is doing good in the industry, outperforming 71.11% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ARCO is significantly below the industry average of 14.12%.
The last Return On Invested Capital (9.14%) for ARCO is above the 3 year average (8.93%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.14% | ||
| ROE | 29.28% | ||
| ROIC | 9.14% |
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 3.33% is in line compared to the rest of the industry. ARCO outperforms 52.59% of its industry peers.
In the last couple of years the Profit Margin of ARCO has grown nicely.
Looking at the Operating Margin, with a value of 7.26%, ARCO is in line with its industry, outperforming 42.96% of the companies in the same industry.
In the last couple of years the Operating Margin of ARCO has grown nicely.
ARCO's Gross Margin of 13.12% is on the low side compared to the rest of the industry. ARCO is outperformed by 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 | 7.26% | ||
| PM (TTM) | 3.33% | ||
| GM | 13.12% |
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.
Compared to 1 year ago, ARCO has about the same amount of shares outstanding.
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 2.51 indicates that ARCO is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.51, ARCO is doing good in the industry, outperforming 70.37% of the companies in the same industry.
ARCO has a Debt/Equity ratio of 1.53. This is a high value indicating a heavy dependency on external financing.
ARCO has a Debt to Equity ratio of 1.53. This is comparable to the rest of the industry: ARCO outperforms 59.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.53 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.51 |
ROIC/WACC1.09
WACC8.37%
2.3 Liquidity
A Current Ratio of 0.61 indicates that ARCO may have some problems paying its short term obligations.
With a Current ratio value of 0.61, ARCO is not doing good in the industry: 67.41% of the companies in the same industry are doing better.
ARCO has a Quick Ratio of 0.61. 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 0.54. This is in the lower half of the industry: ARCO underperforms 67.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
ARCO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -19.75%.
The Earnings Per Share has been growing by 11.38% on average over the past years. This is quite good.
Looking at the last year, ARCO shows a small growth in Revenue. The Revenue has grown by 3.19% in the last year.
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)-19.75%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-50%
Revenue 1Y (TTM)3.19%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%-0.44%
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 11.73% on average per year.
Based on estimates for the next years, ARCO will show a small growth in Revenue. The Revenue will grow by 6.62% on average per year.
EPS Next Y-2.43%
EPS Next 2Y7.12%
EPS Next 3Y12.5%
EPS Next 5Y11.73%
Revenue Next Year4.17%
Revenue Next 2Y6.04%
Revenue Next 3Y7.69%
Revenue Next 5Y6.62%
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.
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
The Price/Earnings ratio is 11.35, which indicates a very decent valuation of ARCO.
Based on the Price/Earnings ratio, ARCO is valued cheaper than 88.15% of the companies in the same industry.
ARCO is valuated cheaply when we compare the Price/Earnings ratio to 26.03, which is the current average of the S&P500 Index.
ARCO is valuated reasonably with a Price/Forward Earnings ratio of 8.93.
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.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.94, ARCO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 8.93 |
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 96.30% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 4.27 |
4.3 Compensation for Growth
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 12.50% in the coming years.
PEG (NY)N/A
PEG (5Y)1
EPS Next 2Y7.12%
EPS Next 3Y12.5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.19%, ARCO has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.56, ARCO pays a better dividend. On top of this ARCO pays more dividend than 85.93% of the companies listed in the same industry.
ARCO's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
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.
The dividend of ARCO decreased in the last 3 years.
Dividend Growth(5Y)17.6%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
33.99% 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.
DP33.99%
EPS Next 2Y7.12%
EPS Next 3Y12.5%
NYSE:ARCO (5/22/2025, 12:53:47 PM)
7.375
-0.07 (-0.87%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners53.05%
Inst Owner Change14.79%
Ins Owners4.5%
Ins Owner ChangeN/A
Market Cap1.55B
Analysts82.86
Price Target10.8 (46.44%)
Short Float %0.91%
Short Ratio1.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.19% |
Yearly Dividend0.24
Dividend Growth(5Y)17.6%
DP33.99%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)16.42%
Min EPS beat(2)4.17%
Max EPS beat(2)28.68%
EPS beat(4)2
Avg EPS beat(4)2.29%
Min EPS beat(4)-19.26%
Max EPS beat(4)28.68%
EPS beat(8)4
Avg EPS beat(8)4.72%
EPS beat(12)7
Avg EPS beat(12)19.53%
EPS beat(16)10
Avg EPS beat(16)-44.03%
Revenue beat(2)0
Avg Revenue beat(2)-1.76%
Min Revenue beat(2)-2.79%
Max Revenue beat(2)-0.73%
Revenue beat(4)2
Avg Revenue beat(4)0.83%
Min Revenue beat(4)-2.79%
Max Revenue beat(4)3.88%
Revenue beat(8)5
Avg Revenue beat(8)0.41%
Revenue beat(12)8
Avg Revenue beat(12)1.37%
Revenue beat(16)12
Avg Revenue beat(16)1.77%
PT rev (1m)-3.63%
PT rev (3m)-12.7%
EPS NQ rev (1m)-4.17%
EPS NQ rev (3m)-23.33%
EPS NY rev (1m)-1.84%
EPS NY rev (3m)-2.99%
Revenue NQ rev (1m)3.37%
Revenue NQ rev (3m)0.75%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 8.93 | ||
| P/S | 0.35 | ||
| P/FCF | N/A | ||
| P/OCF | 5.82 | ||
| P/B | 3.06 | ||
| P/tB | 3.52 | ||
| EV/EBITDA | 4.27 |
EPS(TTM)0.65
EY8.81%
EPS(NY)0.83
Fwd EY11.2%
FCF(TTM)-0.29
FCFYN/A
OCF(TTM)1.27
OCFY17.18%
SpS21.22
BVpS2.41
TBVpS2.1
PEG (NY)N/A
PEG (5Y)1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.14% | ||
| ROE | 29.28% | ||
| ROCE | 15.26% | ||
| ROIC | 9.14% | ||
| ROICexc | 9.76% | ||
| ROICexgc | 10.09% | ||
| OM | 7.26% | ||
| PM (TTM) | 3.33% | ||
| GM | 13.12% | ||
| 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 Turnover1.55
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.53 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.55 | ||
| Cap/Depr | 184.74% | ||
| Cap/Sales | 7.33% | ||
| Interest Coverage | 6.24 | ||
| Cash Conversion | 53.17% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.54 | ||
| Altman-Z | 2.51 |
F-Score4
WACC8.37%
ROIC/WACC1.09
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)-19.75%
EPS 3Y45.99%
EPS 5Y11.38%
EPS Q2Q%-50%
EPS Next Y-2.43%
EPS Next 2Y7.12%
EPS Next 3Y12.5%
EPS Next 5Y11.73%
Revenue 1Y (TTM)3.19%
Revenue growth 3Y18.89%
Revenue growth 5Y8.6%
Sales Q2Q%-0.44%
Revenue Next Year4.17%
Revenue Next 2Y6.04%
Revenue Next 3Y7.69%
Revenue Next 5Y6.62%
EBIT growth 1Y3.32%
EBIT growth 3Y34.81%
EBIT growth 5Y15.08%
EBIT Next Year68.4%
EBIT Next 3Y30.35%
EBIT Next 5Y23.6%
FCF growth 1Y-377.98%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-30.14%
OCF growth 3Y1.13%
OCF growth 5Y3.61%