NYSE:ARCO

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Executive Summary

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


Snowflake Analysis

High growth potential with weak fundamentals.


Similar Companies

Share Price & News

How has Arcos Dorados Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARCO is less volatile than 75% 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.


Market Performance


7 Day Return

9.4%

ARCO

3.5%

US Hospitality

1.5%

US Market


1 Year Return

-24.6%

ARCO

-3.7%

US Hospitality

22.3%

US Market

Return vs Industry: ARCO underperformed the US Hospitality industry which returned -5% over the past year.

Return vs Market: ARCO underperformed the US Market which returned 22.1% over the past year.


Shareholder returns

ARCOIndustryMarket
7 Day9.4%3.5%1.5%
30 Day28.2%25.2%8.8%
90 Day21.5%18.3%10.8%
1 Year-23.3%-24.6%-2.4%-3.7%25.1%22.3%
3 Year-41.1%-43.7%3.9%-2.5%49.5%39.6%
5 Year83.3%75.2%47.9%33.3%105.8%83.3%

Long-Term Price Volatility Vs. Market

How volatile is Arcos Dorados Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

7.19x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: ARCO ($5.36) is trading above our estimate of fair value ($0.4)

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


Price To Earnings Ratio

PE vs Industry: ARCO is unprofitable, so we can't compare its PE Ratio to the US Hospitality industry average.

PE vs Market: ARCO is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ARCO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ARCO is overvalued based on its PB Ratio (7.2x) compared to the US Hospitality industry average (2.7x).


Next Steps

Future Growth

How is Arcos Dorados Holdings forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

94.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARCO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.2%).

Earnings vs Market: ARCO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ARCO's is expected to become profitable in the next 3 years.

Revenue vs Market: ARCO's revenue (14.1% per year) is forecast to grow faster than the US market (10.2% per year).

High Growth Revenue: ARCO's revenue (14.1% 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%)


Next Steps

Past Performance

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

-8.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARCO is currently unprofitable.

Growing Profit Margin: ARCO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ARCO is unprofitable, and losses have increased over the past 5 years at a rate of 8.3% per year.

Accelerating Growth: Unable to compare ARCO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ARCO is unprofitable, making it difficult to compare its past year earnings growth to the Hospitality industry (-52.1%).


Return on Equity

High ROE: ARCO has a negative Return on Equity (-88.96%), as it is currently unprofitable.


Next Steps

Financial Health

How is Arcos Dorados Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: ARCO's short term assets ($361.2M) do not cover its short term liabilities ($465.4M).

Long Term Liabilities: ARCO's short term assets ($361.2M) do not cover its long term liabilities ($1.5B).


Debt to Equity History and Analysis

Debt Level: ARCO's debt to equity ratio (502.3%) is considered high.

Reducing Debt: ARCO's debt to equity ratio has increased from 232.4% to 502.3% over the past 5 years.

Debt Coverage: ARCO's debt is not well covered by operating cash flow (4.5%).

Interest Coverage: Insufficient data to determine if ARCO's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

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

0.92%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARCO's dividend (0.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.49%).

High Dividend: ARCO's dividend (0.92%) is low compared to the top 25% of dividend payers in the US market (4.1%).


Stability and Growth of Payments

Stable Dividend: ARCO's dividend payments have been volatile in the past 10 years.

Growing Dividend: ARCO's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: ARCO is paying a dividend but the company is unprofitable.


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?

2.4yrs

Average management tenure


CEO

Marcelo Rabach (50 yo)

1.42yrs

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

NamePositionTenureCompensationOwnership
Woods Staton
Executive Chairman13.92yrsno data38.91%
$ 434.5m
Marcelo Rabach
CEO & Director1.42yrsno datano data
Mariano Tannenbaum
Chief Financial Officer3.83yrsno datano data
Luis Raganato
Chief Operating Officer1.42yrsno datano data
Marco Cordon
Chief Technology Officer1.17yrsno datano data
Daniel Schleiniger
Vice President of Investor Relations0.92yrno datano data
Juan Bastidas Saldarriaga
Chief Legal Counsel10.42yrsno datano data
David Grinberg
Vice President of Corporate Communications2.92yrsno datano data
Santiago Blanco
Chief Marketing & Digital Officer1.92yrsno datano data
Diego Benenzon
Vice President for Human Resources6.92yrsno datano data
Francisco Staton
Divisional President of Caribbean & Director2.67yrsno datano data
Alejandro Yapur
Divisional President of SLAD7.42yrsno datano data

2.4yrs

Average Tenure

50.5yo

Average Age

Experienced Management: ARCO's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Woods Staton
Executive Chairman13.92yrsno data38.91%
$ 434.5m
Marcelo Rabach
CEO & Director1.42yrsno datano data
Francisco Staton
Divisional President of Caribbean & Director2.67yrsno datano data
Annette Franqui
Director13.92yrsno datano data
José Alberto Vélez Cadavid
Independent Director9.5yrsno datano data
Siu Chu
Independent Director9.67yrsno datano data
Carlos Hernández-Artigas
Director13.92yrsno datano data
Jorge Ricardo Gutiérrez Muñoz
Independent Director4.42yrsno datano data
Sergio Daniel Alonso
Directorno datano datano data
José Raul Fernández
Director7.17yrsno datano data
Cristina Presz De Luca
Independent Director1.08yrsno datano data

9.5yrs

Average Tenure

58yo

Average Age

Experienced Board: ARCO's board of directors are considered experienced (9.5 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 company bio, 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
  • Market Cap: US$1.117b
  • Shares outstanding: 208.33m
  • Website: https://www.arcosdorados.com

Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ARCONYSE (New York Stock Exchange)YesClass A SharesUSUSDApr 2011
AD8DB (Deutsche Boerse AG)YesClass A SharesDEEURApr 2011
ARCOBASE (Buenos Aires Stock Exchange)CEDEAR EACH 1 REP 2 COM CL 'A' USD0.00ARARSApr 2019

Biography

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald’s restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald’s restaurants in 20 countries and territories in...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/04 23:58
End of Day Share Price2020/12/04 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


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.