ARCO
BULLISH
$7.7
Live
Arcos Dorados Holdings Inc. · NYSE
Target $9.91
(+28.7%)
$6.51
52W Range
$8.98
At a glance
Key valuation, profitability, growth, and risk metrics.
Updated Mar 19, 2026
Market cap
$1.62B
P/E
6.58
ROE
39.0%
Profit margin
5.4%
Debt/Equity
2.76
Dividend yield
3.12%
AI Analysis
AI-powered fundamental assessment
Confidence
87%
ARCO's Piotroski F-Score of 4 indicates a borderline stable financial health, but the company exhibits strong profitability and exceptional earnings growth, with a 327% YoY EPS surge and a 151% average earnings surprise over the last four quarters. Despite a high debt/equity ratio of 2.76 and weak liquidity (current ratio 0.89), the stock trades at a deeply discounted valuation relative to its intrinsic value and Graham Number, suggesting significant undervaluation. The 3.12% dividend yield with a conservative payout ratio of 20.5% adds defensive appeal, while analyst target prices imply upside potential. The combination of high growth, low valuation, and improving earnings momentum supports a bullish stance.
Key Strengths
Exceptional earnings growth (327% YoY) and consistent beat rates in recent quarters
Strong ROE of 39.03% and high gross/operating margins for the restaurant sector
Significantly undervalued relative to intrinsic value ($34.52) and Graham Number ($9.65)
Conservative dividend payout ratio (20.51%) with a 3.12% yield
Positive earnings surprise history (151.49% average over last 4 quarters)
Key Risks
Piotroski F-Score of 4 indicates weak financial health, with only 4 out of 9 criteria met
High debt/equity ratio of 2.76 raises leverage concerns despite strong cash flow
Current ratio of 0.89 and quick ratio of 0.65 suggest liquidity strain
No Altman Z-Score available, but the financial structure implies distress risk if macro conditions worsen
Technical trend is bearish (0/100), indicating short-term momentum weakness
AI Fair Value Estimate
Based on comprehensive analysis
$34.52
+348.3% above current price
Performance Snowflake
Multi-dimensional analysis across 5 key categories
Overall
78
Strong
92
88
85
55
70
AI Verdict
Strong Buy
Key drivers: High earnings growth and positive surprise history, Deep undervaluation relative to intrinsic value, Strong ROE and margin performance, Conservative dividend payout, Positive long-term price trend (5Y +65.6%)
Confidence
88%
Value
92/100
Ref P/E, PEG, Graham Number
Positives
- Current price ($7.70) is 77.6% below intrinsic value ($34.52)
- P/E of 6.58 is far below sector average (42.70)
- Price/Sales of 0.36 is extremely low for a consumer cyclical
- Graham Number ($9.65) is only slightly above current price, indicating defensive margin
Watchpoints
- PEG ratio unavailable, limiting growth-adjusted valuation analysis
- Forward P/E of 11.27 is elevated relative to current P/E, suggesting future expectations are priced in
Future
88/100
Ref Growth rates
Positives
- 327% YoY earnings growth and 5.2% revenue growth indicate strong momentum
- Recent Q/Q EPS growth of +545.5% signals accelerating performance
- Consistent earnings surprises (151.49% avg) suggest strong operational execution
- Forward P/E of 11.27 implies market expects continued growth
Watchpoints
- No PEG ratio available, limiting growth sustainability assessment
- High growth may be difficult to sustain in a cyclical sector
Past
85/100
Ref Historical trends
Positives
- 25 quarters of earnings data show consistent improvement since 2020
- Multiple quarters with >50% earnings surprises, including +448.3% in 2025-11
- Recovery from deep losses in 2020 (e.g., -7496.4% surprise) to profitability
- Positive 5-year price return (+65.6%) despite recent pullback
Watchpoints
- Historical volatility in earnings (e.g., -360.1% surprise in 2021-05)
- Several quarters with negative surprises, indicating inconsistency
Health
55/100
Ref Altman Z-Score, Piotroski F-Score
Positives
- High ROE (39.03%) and strong operating margins (12.34%) indicate efficient capital use
- Positive operating cash flow and earnings growth suggest underlying strength
Watchpoints
- Piotroski F-Score of 4 is below the 7+ threshold for strong health
- Debt/Equity of 2.76 is significantly above sector average (1.65)
- Current ratio (0.89) and quick ratio (0.65) indicate liquidity risk
- No Altman Z-Score available, but financial structure raises distress concerns
Dividend
70/100
Ref Yield, Payout
Positives
- 3.12% dividend yield is attractive for a consumer cyclical
- Payout ratio of 20.51% is very conservative, supporting sustainability
- Dividend strength score of 35/100 reflects moderate reliability
Watchpoints
- No 5-year average yield available, limiting trend analysis
- Ex-dividend date not disclosed, reducing transparency
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Current Price
$7.7
Analyst Target
$9.91
Upside/Downside
+28.7%
Multi-Horizon Performance vs Peers
Price momentum across 5Y → 1W horizons for ARCO and closest competitors.
Updated 2026-03-18
| Company | 5Y | 3Y | 1Y | 6M | 1M | 1W |
|---|---|---|---|---|---|---|
|
ARCO
Arcos Dorados Holdings Inc.
Primary
|
+65.6% | +8.2% | -2.4% | +15.5% | -7.9% | -3.9% |
|
PSNY
Polestar Automotive Holding UK PLC
Peer
|
-94.0% | -84.3% | -40.4% | -31.9% | +5.4% | -11.2% |
|
TILE
Interface, Inc.
Peer
|
+131.3% | +266.5% | +59.3% | +2.5% | +16.3% | +3.9% |
|
CYD
China Yuchai International Limited
Peer
|
+235.5% | +520.2% | +183.2% | +14.0% | +5.3% | -2.4% |
|
AIN
Albany International Corp.
Peer
|
-20.0% | -45.0% | -27.5% | -19.5% | +12.4% | -0.5% |
ARC
Arcos Dorados Holdings Inc.
Primary
5Y
+65.6%
3Y
+8.2%
1Y
-2.4%
6M
+15.5%
1M
-7.9%
1W
-3.9%
PSN
Polestar Automotive Holding UK PLC
Peer
5Y
-94.0%
3Y
-84.3%
1Y
-40.4%
6M
-31.9%
1M
+5.4%
1W
-11.2%
TIL
Interface, Inc.
Peer
5Y
+131.3%
3Y
+266.5%
1Y
+59.3%
6M
+2.5%
1M
+16.3%
1W
+3.9%
CYD
China Yuchai International Limited
Peer
5Y
+235.5%
3Y
+520.2%
1Y
+183.2%
6M
+14.0%
1M
+5.3%
1W
-2.4%
AIN
Albany International Corp.
Peer
5Y
-20.0%
3Y
-45.0%
1Y
-27.5%
6M
-19.5%
1M
+12.4%
1W
-0.5%
Positive values indicate cumulative gains over the specified period. Comparables pulled from the same sector to highlight whether momentum is stock-specific or industry-wide.
Historical Performance Trends
Long-term financial metrics and growth patterns
Revenue & Net Income
Profit & Operating Margins
Return on Equity (ROE)
Quarterly Revenue Growth
Historical data shows last 12 quarters (3 years)
Valuation Metrics
Key valuation ratios and pricing indicators
P/E Ratio
6.58
Forward P/E
11.27
PEG Ratio
N/A
P/B Ratio
2.18
P/S Ratio
0.36
EV/Revenue
0.75
EV/EBITDA
6.26
Market Cap
$1.62B
Profitability
Profit margins and return metrics
Profit Margin
5.38%
Operating Margin
12.34%
Gross Margin
12.39%
ROE
39.03%
ROA
6.87%
Growth
Revenue and earnings growth rates
Revenue Growth
+5.2%
Earnings Growth
+327.2%
Q/Q Revenue Growth
N/A
Q/Q Earnings Growth
+327.2%
Financial Health
Balance sheet strength and liquidity metrics
Debt/Equity
2.76
High debt
Current Ratio
0.89
Weak
Quick Ratio
0.65
Poor
Cash/Share
$1.22
Financial Statement Flow
Interactive flow visualization showing how money moves through the company Q3 2025
Revenue
$1.2B
Gross Margin
11.9%
Op. Margin
12.3%
Net Margin
12.6%
Total Assets
$3.6B
Liabilities
$2.8B
Equity
$0.7B
Debt/Equity
3.79x
Operating CF
$0.1B
CapEx
$-0.1B
Free Cash Flow
$0.0B
FCF Yield
29%
Quarterly Earnings History
EPS performance vs analyst estimates
2026-03-19
$N/A
2025-11-12
$0.71
+448.3% surprise
2025-08-13
$0.11
+52.4% surprise
2025-05-14
$0.07
-46.1% surprise
Consumer Cyclical Sector Comparison
Comparing ARCO against 386 companies in the Consumer Cyclical sector
(23 bullish, 133 neutral, 230 bearish)
P/E Ratio
6.58
This Stock
vs
33.98
Sector Avg
-80.6%
(Discount)
Return on Equity (ROE)
39.03%
This Stock
vs
-43.92%
Sector Avg
-188.9%
(Below Avg)
Profit Margin
5.38%
This Stock
vs
-5.4%
Sector Avg
-199.8%
(Weaker)
Debt to Equity
2.76
This Stock
vs
1.51
Sector Avg
+82.6%
(Higher)
Revenue Growth
5.2%
This Stock
vs
28.42%
Sector Avg
-81.7%
(Slower)
Current Ratio
0.89
This Stock
vs
2.46
Sector Avg
-63.9%
(Weaker)
Similar Companies
Peer comparison within the same industry
| Company | AI Rating | Market Cap | P/E | ROE | Profit Margin | Price | |
|---|---|---|---|---|---|---|---|
|
ARCO
Arcos Dorados Holdings Inc.
|
BULLISH | $1.62B | 6.58 | 39.0% | 5.4% | $7.7 | |
|
PSNY
Polestar Automotive Holding UK PLC
|
BEARISH | $1.65B | - | -% | -105.9% | $18.06 | Compare |
|
TILE
Interface, Inc.
|
BULLISH | $1.66B | 14.49 | 20.6% | 8.4% | $28.4 | Compare |
|
CYD
China Yuchai International Limited
|
BULLISH | $1.58B | 20.11 | -% | 2.2% | $42.24 | Compare |
|
AIN
Albany International Corp.
|
BEARISH | $1.7B | - | -6.1% | -4.7% | $57.56 | Compare |
ARCO
Arcos Dorados...
BULLISH
Mkt Cap
$1.6B
P/E
6.6
ROE
39.0%
Price
$7.7
Wall Street Analysts
Professional analyst ratings and price targets
Consensus
NONE
9 analysts
JP Morgan
2025-11-11
Neutral
Neutral
Banco Bradesco BBI S.A
2025-11-03
Outperform
Neutral
Past News Coverage
Recent headlines mentioning ARCO from our newsroom.
Newest → oldest
No matching news yet.