ARCO

Arcos Dorados Holdings Inc.

Fundamental data last updated:June 16, 2026

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company profile

SECTOR

Consumer Cyclical

industry

Restaurants

Exchange

NYSE

County of HQ

UY

Next Earnings Date

08/19/2026

Business Summary

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. As of December 31, 2021, it operated or franchised 2,261 restaurants. The company was founded in 2007 and is based in Montevideo, Uruguay.

 


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VALUATION

P/E

7.97

Market Cap ($M USD)

$1.87B

Forward P/E

7.52

PEG

1.24

PRICE TO SALES

0.39

PRICE TO BOOK

2.41

EV / EBITDA

6.40

5-Year Average P/E

Free Cash Flow Yield

2.93%

DCF Value

$60.60

Graham Number

$9.60

Price to FCF

34.12

EV to FCF

69.38

Earnings Yield

12.54%

FCF Yield

2.93%

DIVIDEND

Yield

2.82%

Annual Payout

$0.25

Payout Ratio

15.10%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$1.11

Next Year EPS Growth Estimate

$1.18

Next Year Revenue Growth Estimate

$674.90B

Return on Equity (ROE)

32.65%

FREE CASH FLOW

Operating Margin

7.51%

Debt-to-Equity

2.91

Piotroski F-Score

4

Altman Z-Score

2.20

Return on Invested Capital (ROIC)

12.25%

Current Ratio

0.80

Quick Ratio

0.80

Net Debt to EBITDA

3.25

Interest Coverage

8.83

Gross Profit margin

12.21%

FCF PER SHARE

$0.26

REVENUE PER SHARE

$22.87

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Gainseekers Quantitative Analysis

Summary

The market seems to be significantly undervaluing Arcos Dorados Holdings Inc. relative to its intrinsic worth. With a DCF value vastly exceeding its snapshot price, the stock appears deeply discounted. The Forward P/E of 7.64 and an Earnings Yield of 11.16% suggest strong earnings potential, while the Altman Z-score of 2.19 indicates moderate financial stability. Despite these positives, the market cap and valuation metrics imply a cautious stance, yet the potential for growth is undeniable.

AI Exposure / Tech Reliance

In the restaurant industry, Arcos Dorados is positioned to leverage AI for operational efficiency and customer engagement. As a major franchisee of McDonald's, it can adopt cutting-edge technologies in supply chain management and customer service. This adaptability could enhance its competitive edge in a rapidly evolving market.

The Bull Case

For value and GARP investors, Arcos Dorados presents a compelling opportunity. The ROIC of 11.46% highlights efficient capital use, while a Piotroski F-Score of 5 suggests moderate financial health. Despite a low FCF Yield, the company's operating margin of 7.49% indicates solid pricing power. These metrics suggest a well-managed company capable of delivering consistent returns.

The Bear Case

However, the stock is not without its risks. The Price to FCF ratio of 169.41 and EV to FCF of 336.31 reveal a concerning cash flow situation. Additionally, with a Price/Book ratio of 2.47 and Price/Sales of 0.41, the stock may be overvalued relative to its book and sales metrics. Its proximity to the 52-week high further suggests potential overextension, warranting caution.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Buy

Average Analyst Price Target

$11.53

Institutional Ownership %

1-Year Beta

0.48

Insider Buying % (6 Mo)

Distance to 52-Week High

9.92%

Distance to 52-Week Low

26.61%

EARNINGS SURPRISE %

54.55%

50-DAY SMA

$8.60

200-DAY SMA

$7.75

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.