ARCO Stock Analysis: Arcos Dorados Holdings | NYSE
Restaurants | NYSE, USA | Market Cap: 1.744m USD | 12M Return: 12.3% | Charts, Fundamentals & Technical Analysis
Avg Turnover: 10.5M
EPS Trend: -90.5%
Qual. Beats: 1
Rev. Trend: 89.8%
Qual. Beats: 0
Warnings
Tailwinds
Seasonality 10.5 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
Arcos Dorados Holdings Inc. (ARCO) is the largest McDonalds franchisee in Latin America and the Caribbean, holding exclusive rights to operate, own, and sub-franchise McDonalds restaurants across 21 countries and territories, including major markets such as Brazil, Mexico, Argentina, and Chile. The company is headquartered in Montevideo, Uruguay, was founded in 2007, and listed on the NYSE following its April 2011 IPO. It is classified within the Consumer Discretionary sector under the Restaurants sub-industry.
The companys business model combines company-operated restaurants with a franchising structure, generating revenue from direct restaurant sales as well as rent and royalty income from sub-franchisees. As a region-specific operator, its performance is closely tied to consumer spending trends, currency movements, and macroeconomic conditions across Latin America, a region where the quick-service restaurant segment has historically grown faster than in mature developed markets.
- Brazil and Mexico same-store sales drive quarterly revenue growth
- Argentine peso devaluation pressures reported earnings and margins
- Beef and chicken input costs pressure restaurant-level margins
| Net Income: 234.3m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.01 > 0.02 and ΔFCF/TA 2.95 > 1.0 |
| NWC/Revenue: -3.54% < 20% (prev -3.14%; Δ -0.40% < -1%) |
| CFO/TA 0.08 > 3% & CFO 306.6m > Net Income 234.3m |
| Net Debt (3.07b) to EBITDA (621.0m): 4.95 < 3 |
| Current Ratio: 0.80 > 1.5 & < 3 |
| Outstanding Shares: last quarter (210.7m) vs 12m ago 0.00% < -2% |
| Gross Margin: 12.21% > 18% (prev 12.86%; Δ -0.65% > 0.5%) |
| Asset Turnover: 132.2% > 50% (prev 128.8%; Δ 3.45% > 0%) |
| Interest Coverage Ratio: 9.60 > 6 (EBIT TTM 415.8m / Interest Expense TTM 43.3m) |
| A: -0.04 (Total Current Assets 694.1m - Total Current Liabilities 864.5m) / Total Assets 3.82b |
| B: 0.21 (Retained Earnings 803.1m / Total Assets 3.82b) |
| C: 0.11 (EBIT TTM 415.8m / Avg Total Assets 3.64b) |
| D: 0.25 (Book Value of Equity 775.4m / Total Liabilities 3.04b) |
| Altman-Z'' = 1.43 = BB |
| DSRI: 0.78 (Receivables 159.7m/190.5m, Revenue 4.82b/4.47b) |
| GMI: 1.05 (GM 12.86% / 12.21%) |
| AQI: 1.29 (AQ_t 0.16 / AQ_t-1 0.12) |
| SGI: 1.08 (Revenue 4.82b / 4.47b) |
| TATA: -0.02 (NI 234.3m - CFO 306.6m) / TA 3.82b) |
| Beneish M = -2.93 (Cap -4..+1) = A |
As of July 10, 2026, the stock is trading at USD 8.28 with a total of 3,251,055 shares traded. Over the past week, the price has changed by +2.99%, over one month by +0.73%, over three months by -2.22% and over the past year by +12.29%.
Current recommended Stop Loss: 7.70 (which is 7% or 2.3 ATR below the current price).
Arcos Dorados Holdings has received a consensus analysts rating of 4.13. Therefore, it is recommended to buy ARCO.
- StrongBuy: 2
- Buy: 5
- Hold: 1
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 11.2 | 34.7% |
P/E Trailing = 7.4595
P/E Forward = 14.5138
P/S = 0.3621
P/B = 2.2359
P/EG = 0.5441
Revenue TTM = 4.82b USD
EBIT TTM = 415.8m USD
EBITDA TTM = 621.0m USD
Long Term Debt = 969.3m USD (from longTermDebt, last quarter)
Short Term Debt = 162.6m USD (from shortTermDebt, last quarter)
Debt = 3.34b USD (from shortLongTermDebtTotal, last quarter) + Leases 1.16b
Net Debt = 3.07b USD (calculated: Debt 3.34b - CCE 266.2m)
Enterprise Value = 4.82b USD (1.74b + Debt 3.34b - CCE 266.2m)
Interest Coverage Ratio = 9.60 (Ebit TTM 415.8m / Interest Expense TTM 43.3m)
EV/FCF = 88.01x (Enterprise Value 4.82b / FCF TTM 54.8m)
FCF Yield = 1.14% (FCF TTM 54.8m / Enterprise Value 4.82b)
FCF Margin = 1.14% (FCF TTM 54.8m / Revenue TTM 4.82b)
Net Margin = 4.86% (Net Income TTM 234.3m / Revenue TTM 4.82b)
Gross Margin = 12.21% ((Revenue TTM 4.82b - Cost of Revenue TTM 4.23b) / Revenue TTM)
Gross Margin QoQ = 10.99% (prev 14.25%)
Tobins Q-Ratio = 1.26 (Enterprise Value 4.82b / Total Assets 3.82b)
Interest Expense / Debt = 1.30% (Interest Expense 43.3m / Debt 3.34b)
Taxrate = 37.37% (140.0m / 374.8m)
NOPAT = 260.4m (EBIT 415.8m * (1 - 37.37%))
Current Ratio = 0.80 (Total Current Assets 694.1m / Total Current Liabilities 864.5m)
Debt / Equity = 4.31 (Debt 3.34b / totalStockholderEquity, last quarter 775.4m)
Debt / EBITDA = 4.95 (Net Debt 3.07b / EBITDA 621.0m)
Debt / FCF = 56.15 (Net Debt 3.07b / FCF TTM 54.8m)
Total Stockholder Equity = 717.7m (last 4 quarters mean from totalStockholderEquity)
RoA = 6.43% (Net Income 234.3m / Total Assets 3.82b)
RoE = 32.65% (Net Income TTM 234.3m / Total Stockholder Equity 717.7m)
RoCE = 24.64% (EBIT 415.8m / Capital Employed (Equity 717.7m + L.T.Debt 969.3m))
RoIC = 9.05% (NOPAT 260.4m / Invested Capital 2.88b)
WACC = 3.31% (E(1.74b)/V(5.09b) * Re(8.08%) + D(3.34b)/V(5.09b) * Rd(1.30%) * (1-Tc(0.37)))
Discount Rate = 8.08% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 56.57 | Cagr: 0.00%
[DCF] Terminal Value 75.44% ; FCFF base≈54.8m ; Y1≈55.0m ; Y5≈58.2m
[DCF] Fair Price = N/A (negative equity: EV 905.9m - Net Debt 3.07b = -2.17b; debt exceeds intrinsic value)
EPS Correlation: -90.48 | EPS CAGR: -16.19% | SUE: 1.16 | # QB: 1
Revenue Correlation: 89.81 | Revenue CAGR: 5.10% | SUE: 0.27 | # QB: 0
EPS current Quarter (2026-06-30): EPS=0.14 | Chg30d=N/A | Revisions=+0% | Analysts=1
EPS next Quarter (2026-09-30): EPS=0.16 | Chg30d=N/A | Revisions=+0% | Analysts=1
EPS current Year (2026-12-31): EPS=0.79 | Chg30d=+0.00% | Revisions=+40% | GrowthEPS=-24.0% | GrowthRev=+11.7%
EPS next Year (2027-12-31): EPS=0.86 | Chg30d=+0.00% | Revisions=+29% | GrowthEPS=+9.6% | GrowthRev=+6.5%
[Analyst] Revisions Ratio: +44% (up=5, down=1)