Arcos Dorados Holdings Inc (ARCO) Stock Analysis — PE Ratio, PS Ratio, Intrinsic Value & 2030 Price Target
Arcos Dorados Holdings Inc stock (ARCO) is currently trading at $8.37. Arcos Dorados Holdings Inc PE ratio is 6.56. Arcos Dorados Holdings Inc PS ratio (Price-to-Sales) is 0.35. Analyst consensus price target for ARCO is $9.91. WallStSmart rates ARCO as Hold.
- ARCO PE ratio analysis and historical PE chart
- ARCO PS ratio (Price-to-Sales) history and trend
- ARCO intrinsic value — DCF, Graham Number, EPV models
- ARCO stock price prediction 2025 2026 2027 2028 2029 2030
- ARCO fair value vs current price
- ARCO insider transactions and insider buying
- Is ARCO undervalued or overvalued?
- Arcos Dorados Holdings Inc financial analysis — revenue, earnings, cash flow
- ARCO Piotroski F-Score and Altman Z-Score
- ARCO analyst price target and Smart Rating
Arcos Dorados Holdings Inc
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ARCO Intrinsic Value Analysis for Value Investors
Benjamin Graham Formula · Arcos Dorados Holdings Inc (ARCO)
ARCO trades at a modest 6% premium above its Graham fair value of $7.96. Consider waiting for a pullback.
Based on Benjamin Graham Formula. Growth rate capped at 25%. For informational purposes only. Not financial advice.
Smart Analysis
Arcos Dorados Holdings Inc (ARCO) · 10 metrics scored
Smart Score
Category Performance
WallStSmart pulls financial metrics like revenue growth, profit margins, and valuation ratios and scores each one from 0 to 10 based on how strong or weak it is. Those 10 scores are grouped into 4 categories: Growth, Profitability, Valuation, and Quality — which form the 4 axes of the spider chart you see. The categories are then combined into a final score out of 100, but not equally. Growth and Profitability together count for 60% of the total, because a fast-growing profitable business matters more than just a cheap one. That final number maps to a rating (Strong Buy, Buy, Hold, Avoid) and a letter grade, giving you one clear Stock Rating.
Investment Thesis
Strong fundamentals in peg ratio, return on equity, price/sales. Concerns around operating margin and eps growth. Fundamentals are solid but monitor weak areas for improvement.
Arcos Dorados Holdings Inc (ARCO) Key Strengths (4)
Growing significantly faster than its price suggests
Every $100 of shareholder equity generates $33 in profit
Paying less than $1 for every $1 of annual revenue
50.55% held by institutions, strong professional interest
Supporting Valuation Data
Arcos Dorados Holdings Inc (ARCO) Areas to Watch (6)
Earnings declining -56.90%, profits shrinking
Very thin margins with limited operational efficiency
Very thin margins, barely profitable
Small-cap company with higher risk but more growth potential
Fairly priced relative to book value
Solid revenue growth at 10.70% per year
Arcos Dorados Holdings Inc (ARCO) Detailed Analysis Report
Overall Assessment
This company scores 60/100 in our Smart Analysis, earning a C grade. Out of 10 metrics analyzed, 4 register as strengths (avg 9.5/10) while 6 fall into concern territory (avg 3.5/10). The category breakdown reveals uneven performance, with some areas requiring attention.
The Bull Case
The strongest argument centers on PEG Ratio, Return on Equity, Price/Sales. Valuation metrics including PEG Ratio (0.54), Price/Sales (0.35) suggest the stock is attractively priced. Profitability is solid with Return on Equity at 33.20%.
The Bear Case
The primary concerns are EPS Growth, Operating Margin, Profit Margin. Some valuation metrics including Price/Book (2.17) suggest expensive pricing. Growth concerns include Revenue Growth at 10.70%, EPS Growth at -56.90%, which may limit upside. Profitability pressure is visible in Operating Margin at 9.37%, Profit Margin at 4.53%.
Key Dynamics to Monitor
Three factors to monitor going forward. First, whether EPS Growth improves, as this is the primary drag on the overall score. Second, margin trajectory, with Return on Equity at 33.20% currently healthy but needing to be sustained. Third, growth sustainability, with Revenue Growth at 10.70% needing to reaccelerate.
Risk Considerations
Based on the metric profile, this is a moderate-to-high risk investment. There are more areas of concern than strength, warranting a more conservative position size. Investors should size positions according to their risk tolerance and maintain diversification.
Bottom Line
Mixed fundamentals with both positives (PEG Ratio, Return on Equity) and negatives (EPS Growth, Operating Margin). A cautious approach is warranted. Monitor for improvement in weak areas before increasing conviction.
Disclaimer: Smart Analysis is a scoring system developed by WallStSmart Team. Scores update daily using multi-model valuation framework. Always conduct your own research and consult with financial advisors before making investment decisions.
ARCO Price-to-Sales(PS) Ratio Chart
Historical valuation based on market cap ÷ trailing 12-month revenue
ARCO's Price-to-Sales ratio of 0.35x sits near its historical average of 0.35x (57th percentile), suggesting the market is pricing in steady-state growth. The current valuation is 67% below its historical high of 1.05x set in Aug 2011, and 246% above its historical low of 0.1x in Sep 2015. Over the past 12 months, the PS ratio has expanded from ~0.2x, reflecting growing market expectations outpacing revenue growth.
WallStSmart Analysis Synopsis
Data-driven financial summary for Arcos Dorados Holdings Inc (ARCO) · CONSUMER CYCLICAL › RESTAURANTS
The Big Picture
Arcos Dorados Holdings Inc operates as a stable business with moderate growth and solid fundamentals. Revenue reached 4.7B with 11% growth year-over-year. Profit margins are thin at 4.5%, typical for companies in this phase that are reinvesting heavily in growth.
Key Findings
ROE of 33.2% means the company generates strong returns on shareholder equity. Above 20% is considered top-tier.
Generating 27M in free cash flow and 111M in operating cash flow. Earnings are translating into actual cash generation.
Earnings fell 57% YoY while revenue grew 11%. This gap usually reflects one-time items (tax benefits, write-offs) in the prior period, not an operational decline.
Debt-to-equity ratio of 2.77 is elevated. High leverage amplifies both gains and losses and increases financial risk.
What to Watch Next
Margin expansion: can Arcos Dorados Holdings Inc push profit margins above 15% as the business scales?
Dividend sustainability with a current yield of 3.6%. Watch payout ratio and free cash flow coverage.
Debt management: total debt of 2.1B is significantly higher than cash (183M). Monitor refinancing risk.
Sector dynamics: monitor RESTAURANTS industry trends, competitive moves, and regulatory changes that could impact Arcos Dorados Holdings Inc.
Bottom Line
Arcos Dorados Holdings Inc offers stability with moderate growth and solid fundamentals. The valuation may present an opportunity for patient investors, though limited growth means returns will likely come from dividends and modest capital appreciation rather than explosive gains.
This synopsis is generated from publicly available financial data. It is not financial advice. Always conduct your own research and consult a qualified financial advisor before making investment decisions.
Insider Transactions
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About Arcos Dorados Holdings Inc(ARCO)
NYSE
CONSUMER CYCLICAL
RESTAURANTS
USA
Arcos Dorados Holdings Inc. is a McDonald's restaurant franchise. The company is headquartered in Montevideo, Uruguay.