ARCO

Arcos Dorados Holdings

Fundamental data last updated:April 13, 2026

company profile

SECTOR

Consumer Cyclical

industry

Restaurants

Exchange

NYSE

County of HQ

United States

Next Earnings Date

05/13/26

Business Summary

Dorman Products generates cash by designing and supplying replacement auto parts, focusing on aftermarket components that address failure points in aging vehicles. Its model benefits from a broad SKU portfolio and recurring demand driven by vehicle maintenance cycles rather than new car sales alone. By controlling sourcing, distribution, and product development, the company captures margin at scale, reflected in its 13.80% operating margin. The moat is built on product breadth, established distribution relationships, and the operational discipline required to manage thousands of parts efficiently, allowing consistent cash generation without excessive leverage.

VALUATION

P/E

8.4

Market Cap ($M USD)

$1,790

Forward P/E

10.8

PEG

1.6

PRICE TO SALES

0.4

PRICE TO BOOK

2.3

EV / EBITDA

6.7

5-Year Average P/E

DIVIDEND

Yield

2.90%

Annual Payout

$0.28

Payout Ratio

20.50%

Consecutive Years of Dividend Growth

0

5-Year Dividend Growth Rate

-

Financial Health & Profitability

Earnings Per Share

$1.17

Next Year EPS Growth Estimate

$0.79

Next Year Revenue Growth Estimate

6.10%

Return on Equity (ROE)

32.90%

Operating Margin

7.90%

Debt-to-Equity

2.8

Piotroski F-Score

6

Altman Z-Score

2.3

Return on Invested Capital (ROIC)

9.30%%

Current Ratio

0.9

Quick Ratio

Gainseekers Quantitative Analysis

Summary

DORM screens as a classic GARP mispricing setup. At 16.5x earnings and just 11.8x forward earnings, the compression in the forward multiple suggests earnings normalization is being overly discounted by the market despite a solid 4.5 Altman Z-Score indicating very low bankruptcy risk. With a $3,292M market cap and 11.60% ROIC, the business is generating respectable returns while trading at only 1.6x sales and 2.2x book, which is not demanding for a profitable operator with a 13.80% operating margin. The balance sheet strength (Current Ratio 3.1, Debt/Equity 16.70%) combined with a Piotroski F-Score of 7 signals financial durability, and the market appears to be pricing in earnings compression too aggressively relative to the company’s financial safety.

AI Exposure / Tech Reliance

As an Auto Parts company within Consumer Cyclical, DORM operates in a sector that increasingly benefits from data-driven inventory optimization, predictive maintenance, and supply chain automation. The ability to integrate AI into demand forecasting and distribution logistics can structurally enhance margins beyond the current 13.80% operating margin. Companies in this space that modernize procurement and SKU management tend to expand ROIC, and DORM already posts 11.60%, giving it a base to compound efficiency gains.

The Bull Case

From a value and GARP perspective, this is where discipline meets opportunity. A Piotroski F-Score of 7 indicates operational stability and improving fundamentals, while a 4.5 Altman Z-Score confirms low balance sheet distress risk. The 11.60% ROIC versus a modest 2.2x price-to-book suggests the market is not overcapitalizing its returns, and the 13.80% operating margin demonstrates solid cost control in a cyclical sector. Add a conservative Debt/Equity ratio of 16.70% and strong liquidity with a 3.1 current ratio, and you have a financially sound operator trading at 11.8x forward earnings with a PEG of 1.2—reasonable for a company expected to continue compounding without leverage-driven fragility.

The Bear Case

The bear case hinges on earnings durability. EPS is 10.5 while next year’s EPS estimate is $6.69, a sharp implied contraction that explains the forward multiple compression and raises legitimate concerns about peak-cycle profitability. A PEG Forward of 1.2 is not a screaming bargain if growth is decelerating, and Return on Equity of just 5.20% is underwhelming relative to the 11.60% ROIC, suggesting capital efficiency may not fully translate to shareholder returns. With minimal dividend commitment (0.4 yield, no payout ratio provided), investors are entirely dependent on earnings stability and multiple expansion, and any sustained cyclical slowdown in Consumer Cyclical demand could pressure margins and justify the market’s caution.

Market Sentiment & Smart Money

Short Interest %

3.70%

Analyst Consensus

1.67

Average Analyst Price Target

$9.91

Institutional Ownership %

51.50%

1-Year Beta

0.93

Insider Buying % (6 Mo)

4.60%%

Distance to 52-Week High

94.70%%

Distance to 52-Week Low

130.70%%