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ARCO

Arcos Dorados HoldingsNYSE:ARCO Stock Report

Last Price

US$5.47

Market Cap

US$1.2b

7D

-1.6%

1Y

6.7%

Updated

16 Jan, 2022

Data

Company Financials +
ARCO fundamental analysis
Snowflake Score
Valuation0/6
Future Growth5/6
Past Performance2/6
Financial Health1/6
Dividends0/6

ARCO Stock Overview

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald’s restaurants.

Arcos Dorados Holdings Competitors

Yum! Brands

NYSE:YUM

US$37.2b

Restaurant Brands International

NYSE:QSR

US$26.3b

Price History & Performance

Summary of all time highs, changes and price drops for Arcos Dorados Holdings
Historical stock prices
Current Share PriceUS$5.47
52 Week HighUS$6.72
52 Week LowUS$4.33
Beta1.38
1 Month Change6.84%
3 Month Change16.88%
1 Year Change6.70%
3 Year Change-35.45%
5 Year Change-1.37%
Change since IPO-73.48%

Recent News & Updates

Dec 30

Arcos Dorados: Bullish On LATAM's Largest McDonald's Franchisee

The largest franchisee of McDonald's restaurants in Latin America is presenting a solid recovery out of the pandemic. The company continues to expand in the region and is seeing strong comparable sales growth against 2019 pre-pandemic benchmarks. We are bullish on ARCO as a regional leader in quick-service restaurants with solid fundamentals and a positive long-term outlook.

Dec 07
Should You Think About Buying Arcos Dorados Holdings Inc. (NYSE:ARCO) Now?

Should You Think About Buying Arcos Dorados Holdings Inc. (NYSE:ARCO) Now?

While Arcos Dorados Holdings Inc. ( NYSE:ARCO ) might not be the most widely known stock at the moment, it saw a...

Nov 17
We Think Arcos Dorados Holdings' (NYSE:ARCO) Robust Earnings Are Conservative

We Think Arcos Dorados Holdings' (NYSE:ARCO) Robust Earnings Are Conservative

Arcos Dorados Holdings Inc. ( NYSE:ARCO ) recently posted some strong earnings, and the market responded positively. We...

Shareholder Returns

ARCOUS HospitalityUS Market
7D-1.6%-1.4%-0.5%
1Y6.7%-0.3%13.7%

Return vs Industry: ARCO exceeded the US Hospitality industry which returned -0.3% over the past year.

Return vs Market: ARCO underperformed the US Market which returned 13.7% over the past year.

Price Volatility

Is ARCO's price volatile compared to industry and market?
ARCO volatility
ARCO Average Weekly Movement5.5%
Hospitality Industry Average Movement7.8%
Market Average Movement6.6%
10% most volatile stocks in US Market15.9%
10% least volatile stocks in US Market2.4%

Stable Share Price: ARCO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: ARCO's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2007n/aMarcelo Rabachhttps://www.arcosdorados.com

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald’s restaurants. The company has the exclusive right to own, operate, and grant franchises of McDonald’s restaurants in 20 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela.

Arcos Dorados Holdings Fundamentals Summary

How do Arcos Dorados Holdings's earnings and revenue compare to its market cap?
ARCO fundamental statistics
Market CapUS$1.17b
Earnings (TTM)US$21.96m
Revenue (TTM)US$2.49b

53.2x

P/E Ratio

0.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARCO income statement (TTM)
RevenueUS$2.49b
Cost of RevenueUS$2.22b
Gross ProfitUS$270.75m
ExpensesUS$248.79m
EarningsUS$21.96m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.10
Gross Margin10.89%
Net Profit Margin0.88%
Debt/Equity Ratio408.8%

How did ARCO perform over the long term?

See historical performance and comparison

Valuation

Is Arcos Dorados Holdings undervalued compared to its fair value and its price relative to the market?

53.17x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ARCO ($5.47) is trading above our estimate of fair value ($1.26)

Significantly Below Fair Value: ARCO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ARCO is poor value based on its PE Ratio (53.2x) compared to the US Hospitality industry average (27.1x).

PE vs Market: ARCO is poor value based on its PE Ratio (53.2x) compared to the US market (17.4x).


Price to Earnings Growth Ratio

PEG Ratio: ARCO is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: ARCO is overvalued based on its PB Ratio (6.3x) compared to the US Hospitality industry average (3.1x).


Future Growth

How is Arcos Dorados Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

48.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARCO's forecast earnings growth (48.2% per year) is above the savings rate (2%).

Earnings vs Market: ARCO's earnings (48.2% per year) are forecast to grow faster than the US market (13% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ARCO's revenue (9.7% per year) is forecast to grow faster than the US market (9.3% per year).

High Growth Revenue: ARCO's revenue (9.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARCO's Return on Equity is forecast to be high in 3 years time (27.7%)


Past Performance

How has Arcos Dorados Holdings performed over the past 5 years?

-49.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARCO has high quality earnings.

Growing Profit Margin: ARCO became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ARCO's earnings have declined by 49.7% per year over the past 5 years.

Accelerating Growth: ARCO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ARCO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Hospitality industry (79.7%).


Return on Equity

High ROE: ARCO's Return on Equity (12%) is considered low.


Financial Health

How is Arcos Dorados Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: ARCO's short term assets ($426.7M) do not cover its short term liabilities ($498.4M).

Long Term Liabilities: ARCO's short term assets ($426.7M) do not cover its long term liabilities ($1.6B).


Debt to Equity History and Analysis

Debt Level: ARCO's net debt to equity ratio (298%) is considered high.

Reducing Debt: ARCO's debt to equity ratio has increased from 181.2% to 408.8% over the past 5 years.

Debt Coverage: ARCO's debt is well covered by operating cash flow (26.8%).

Interest Coverage: ARCO's interest payments on its debt are not well covered by EBIT (1.7x coverage).


Balance Sheet


Dividend

What is Arcos Dorados Holdings's current dividend yield, its reliability and sustainability?

1.63%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ARCO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ARCO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ARCO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ARCO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: ARCO is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ARCO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.5yrs

Average management tenure


CEO

Marcelo Rabach (51 yo)

2.5yrs

Tenure

Mr. Marcelo Rabach serves as Chief Executive Officer at Arcos Dorados Holdings, Inc. since July 1, 2019 and is its Director. He served as Chief Operating Officer of Arcos Dorados Holdings, Inc. since Augus...


Leadership Team

Experienced Management: ARCO's management team is considered experienced (3.5 years average tenure).


Board Members

Experienced Board: ARCO's board of directors are seasoned and experienced ( 10.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arcos Dorados Holdings Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Arcos Dorados Holdings Inc.
  • Ticker: ARCO
  • Exchange: NYSE
  • Founded: 2007
  • Industry: Restaurants
  • Sector: Consumer Services
  • Implied Market Cap: US$1.168b
  • Shares outstanding: 213.49m
  • Website: https://www.arcosdorados.com

Location

  • Arcos Dorados Holdings Inc.
  • Dr. Luis Bonavita 1294
  • 5th Floor
  • Montevideo
  • 11300
  • Uruguay

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/16 23:02
End of Day Share Price2022/01/14 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.