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Arcos Dorados (ARCO) Gains As Market Dips: What You Should Know

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In the latest trading session, Arcos Dorados (ARCO - Free Report) closed at $9.56, marking a +1.06% move from the previous day. This change outpaced the S&P 500's 0.53% loss on the day.

Prior to today's trading, shares of the restaurant owner had gained 9.24% over the past month. This has outpaced the Retail-Wholesale sector's gain of 3.31% and the S&P 500's gain of 4.86% in that time.

Wall Street will be looking for positivity from Arcos Dorados as it approaches its next earnings report date. The company is expected to report EPS of $0.14, up 100% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $976.97 million, up 10.53% from the prior-year quarter.

ARCO's full-year Zacks Consensus Estimates are calling for earnings of $0.72 per share and revenue of $4.08 billion. These results would represent year-over-year changes of +4.35% and +13.36%, respectively.

Investors might also notice recent changes to analyst estimates for Arcos Dorados. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Arcos Dorados is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, Arcos Dorados currently has a Forward P/E ratio of 13.14. This valuation marks a discount compared to its industry's average Forward P/E of 23.8.

We can also see that ARCO currently has a PEG ratio of 1.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 34, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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