QualityDipStocks / Consumer Discretionary · Restaurants
Arcos Dorados Holdings Shares ARCO
Outside our quality screen, so we don’t track its dips. It’s 29% below its 52-week high.
Outside our quality screen. No fair value estimate for now: a capital-spending surge is squeezing its free cash flow.
- Fair value est.
- n/a
- Market Value
- —
- Off 52-wk high
- −29%
- Risk vs market
- Market-likebeta 0.93
52-week range at its 52-week low
Price $6.77
5 bullish · 5 bearish See why
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the low ($6.73, Oct 30) about 37%; today about 36%. The last 3 years delivered −51%/yr (free cash flow).
Dashed line: what the last 3 years delivered, −51%/yr (free cash flow)
| Low | Now | |
|---|---|---|
| Price | $6.73Oct 30 | $6.77 |
| Implied growth | +37% | +36% |
| P/E | 6.7× | 6.6× |
| P/FCF | 94.6× | 93.4× |
| EV/Sales | 0.5× | 0.5× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
Estimate unreliable for ARCO: free cash flow is squeezed by a capital-spending surge (capex is 95% of operating cash flow over the last 12 months, vs 63% in FY2022), so a DCF on today's free cash flow would understate the business. We’d rather show nothing than a made-up number.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much ARCO moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves about in line with the market, and its own price swings are 3.0× the S&P 500’s.
- Beta vs S&P 500
- 0.93
- Volatility
- 39% vs 13% SPY
- Correlation SPY
- 0.31
- Correlation QQQ
- 0.21
How it ranks
Where ARCO stands vs every one of the 2,467 stocks we cover that has the number. Longer bar = better.
Not in the top quarter on any of these 5 measures
- Free cash flow yield1.1% · free cash flow vs market capLowest 25%of 1,690
- Dividends + buybacks yield3.6% · cash paid out or used to retire shares, vs market capTop 38%of 2,227
- Revenue growth, last 12 months+4.7% · vs the 12 months beforeLowest 29%of 2,184
- Operating margin7.8% · of sales kept as operating profitLowest 40%of 1,549
- Return on invested capital16% · profit per dollar of capitalTop 28%of 1,001
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationP/E of 6.6× vs a 20.1× median for the 411 Consumer Discretionary companies we cover.
GrowthDiluted EPS grew 42% to $1.01 in FY2025.
ValuationEV/EBITDA of 3.8×: modest for what the business earns before interest, tax and depreciation.
ProfitabilityReturn on equity of 33% over the last 12 months.
Cash returnsDividend yield of 3.6% ($51M paid over 12 months, 24% of earnings).
Top bearish points 5 of 5
Balance sheetDebt rose 53% to $1.1B from FY2023 to FY2025.
Balance sheetNet debt of $715M, 51% of the market cap (Dec 31, 2025).
ProfitabilityReturn on equity fell 8 points in two fiscal years, to 28% in FY2025.
ValuationFree-cash-flow yield is just 1.1% (price / FCF 93×), so the price leans on future growth.
QualityDoesn’t pass our quality screen: net debt 3.1× EBITDA (limit 3×).
All fundamentals
P/E 6.6 · FCF yield 1.1% · ROE 33%
Valuation
- P/E
- 6.6×Consumer Discretionary median 20.1×
- Price / FCF
- 93.4×
- FCF yield
- 1.1%
- EV / EBITDA
- 3.8×
- Price / sales
- 0.30×
- Price / book
- 1.82×
- Market cap
- $1.4Blisted
- Enterprise value
- $2.1B
Growth
- Revenue, 12 months
- $4.7B
- Sales growth, 12 months
- +4.7%vs the 12 months before
- Sales growth, 3 yrs
- +8.9%/yrfrom FY2022
- Diluted EPS, 12 months
- $1.01
- EPS growth, last FY
- +42.3%
- Net income, 12 months
- $212M
- Net income growth
- +43%12 months vs before
Profitability
- Gross margin
- 98.1%
- Operating margin
- 7.8%
- Net margin
- 4.5%
- FCF margin
- 0.3%
- Return on equity
- 33%
- Return on invested capital
- 16%
Balance sheet
- Cash & short-term inv.
- $422M
- Total debt
- $1.1B
- Net cash
- −$715M
- Debt / equity
- 1.48×
- Interest coverage
- 26.7×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $15M
- FCF growth, 12 months
- n/anot reported in its SEC filings
- Dividend yield
- 3.61%$51M paid
- Payout ratio
- 24%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- n/ano quarterly diluted share count
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Dec 31, 2025; balance sheet at Dec 31, 2025. From Arcos Dorados Holdings Shares’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $0.1B · Sales +14%
- Free cash flow, 12 months$0.1B
- Free-cash-flow yield1.1%
- Free-cash-flow margin3%
- Gross margin12%
- Operating margin6%
- Return on invested capital9%
- Return on equity36%
- Sales growth (latest quarter vs year-ago quarter)+14%
- Net debt / EBITDA3.1×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $6.77
- 52-wk lowlowest close, 1 year$6.73−0.6%
- PriceMon Nov 2 close$6.77you are here
- 52-wk highhighest close, 1 year$9.50+40.3%
Momentum & 52-week range
RSI 32 · 5 days −3.8%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Next report
Nov 12
- DateThu Nov 12, before the open
- Consensus EPS$0.16
- Year-ago EPS$0.12
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
ARCO is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Arcos Dorados Holdings Shares in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 5:14 PM ET.
Compare with peers
Closest in size in Restaurants
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.