ARCOS DORADOS HOLDINGS INC-A (ARCO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ARCO - VGG0457F1071 - Common Stock
7.88 USD
0 (0%)
7.97 USD
+0.09 (+1.14%)
We assign a fundamental rating of 4 out of 10 to ARCO. ARCO was compared to 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 has a decent growth rate and is not valued too expensively. Finally 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.
ARCO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 6.88%, ARCO is doing good in the industry, outperforming 75.94% of the companies in the same industry.
With an excellent Return On Equity value of 32.94%, ARCO belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.78%, ARCO is in the better half of the industry, outperforming 63.91% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ARCO 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 has a Profit Margin (5.39%) which is in line with 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.
With a Gross Margin value of 12.39%, ARCO is not doing good in the industry: 88.72% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of ARCO has grown nicely.
| 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.
The debt/assets ratio for ARCO is higher compared to a year ago.
2.2 Solvency
ARCO has an Altman-Z score of 2.25. 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 2.25. This is in the better half of the industry: ARCO outperforms 62.41% 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 has a worse Debt to FCF ratio (383.76) than 61.65% of its industry peers.
A Debt/Equity ratio of 1.32 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 1.32, ARCO is in line with its industry, outperforming 56.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 383.76 | ||
| Altman-Z | 2.25 |
ROIC/WACC1.02
WACC7.63%
2.3 Liquidity
ARCO has a Current 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 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's Quick ratio of 0.81 is in line compared 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%.
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
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 Year3.75%
Revenue Next 2Y5.68%
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.
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
A Price/Earnings ratio of 13.82 indicates a correct valuation of ARCO.
ARCO's Price/Earnings ratio is rather cheap when compared to the industry. ARCO is cheaper than 83.46% of the companies in the same industry.
ARCO is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.27, the valuation of ARCO can be described as very reasonable.
87.22% 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 23.98. ARCO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.82 | ||
| Fwd PE | 11.27 |
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.
Based on the Price/Free Cash Flow ratio, ARCO is valued a bit more expensive than 61.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 642.66 | ||
| EV/EBITDA | 4.25 |
4.3 Compensation for Growth
ARCO has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.22
EPS Next 2Y-1.44%
EPS Next 3Y6.05%
5. Dividend
5.1 Amount
ARCO has a Yearly Dividend Yield of 3.03%. Purely for dividend investing, there may be better candidates out there.
ARCO's Dividend Yield is rather good when compared to the industry average which is at 6.32. ARCO pays more dividend than 87.22% of the companies in the same industry.
ARCO's Dividend Yield is rather good when compared to the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
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.
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%
7.88
0 (0%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners48.76%
Inst Owner Change-0.91%
Ins Owners4.55%
Ins Owner ChangeN/A
Market Cap1.66B
Revenue(TTM)4.56B
Net Income(TTM)245.35M
Analysts81.43
Price Target9.84 (24.87%)
Short Float %2.39%
Short Ratio4.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
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)-0.04%
Revenue NY rev (3m)-0.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.82 | ||
| Fwd PE | 11.27 | ||
| P/S | 0.36 | ||
| P/FCF | 642.66 | ||
| P/OCF | 6.13 | ||
| P/B | 2.23 | ||
| P/tB | 2.77 | ||
| EV/EBITDA | 4.25 |
EPS(TTM)0.57
EY7.23%
EPS(NY)0.7
Fwd EY8.88%
FCF(TTM)0.01
FCFY0.16%
OCF(TTM)1.29
OCFY16.32%
SpS21.63
BVpS3.54
TBVpS2.84
PEG (NY)N/A
PEG (5Y)1.22
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 | 2.25 |
F-Score5
WACC7.63%
ROIC/WACC1.02
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 Year3.75%
Revenue Next 2Y5.68%
Revenue Next 3Y6.2%
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 13.82 and the Price/Book (PB) ratio is 2.23.
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.