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Are Investors Undervaluing Arcos Dorados (ARCO) Right Now?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Arcos Dorados (ARCO - Free Report) is a stock many investors are watching right now. ARCO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13 right now. For comparison, its industry sports an average P/E of 25.07. Over the past 52 weeks, ARCO's Forward P/E has been as high as 17.05 and as low as 10.55, with a median of 13.14.
ARCO is also sporting a PEG ratio of 1.37. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ARCO's PEG compares to its industry's average PEG of 1.80. Within the past year, ARCO's PEG has been as high as 1.62 and as low as 0.36, with a median of 1.13.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ARCO has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.04.
Finally, investors should note that ARCO has a P/CF ratio of 7.60. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ARCO's current P/CF looks attractive when compared to its industry's average P/CF of 20.55. ARCO's P/CF has been as high as 7.63 and as low as 5.42, with a median of 6.54, all within the past year.
Investors could also keep in mind Dave & Buster's Entertainment (PLAY - Free Report) , an Retail - Restaurants stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Dave & Buster's Entertainment is currently trading with a Forward P/E ratio of 11.72 while its PEG ratio sits at 0.68. Both of the company's metrics compare favorably to its industry's average P/E of 25.07 and average PEG ratio of 1.80.
Over the past year, PLAY's P/E has been as high as 16.31, as low as 8.46, with a median of 10.64; its PEG ratio has been as high as 0.81, as low as 0.56, with a median of 1.13 during the same time period.
Additionally, Dave & Buster's Entertainment has a P/B ratio of 6.10 while its industry's price-to-book ratio sits at -24.38. For PLAY, this valuation metric has been as high as 6.18, as low as 3.93, with a median of 4.83 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arcos Dorados and Dave & Buster's Entertainment are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCO and PLAY feels like a great value stock at the moment.
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Are Investors Undervaluing Arcos Dorados (ARCO) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Arcos Dorados (ARCO - Free Report) is a stock many investors are watching right now. ARCO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 13 right now. For comparison, its industry sports an average P/E of 25.07. Over the past 52 weeks, ARCO's Forward P/E has been as high as 17.05 and as low as 10.55, with a median of 13.14.
ARCO is also sporting a PEG ratio of 1.37. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ARCO's PEG compares to its industry's average PEG of 1.80. Within the past year, ARCO's PEG has been as high as 1.62 and as low as 0.36, with a median of 1.13.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ARCO has a P/S ratio of 0.57. This compares to its industry's average P/S of 1.04.
Finally, investors should note that ARCO has a P/CF ratio of 7.60. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ARCO's current P/CF looks attractive when compared to its industry's average P/CF of 20.55. ARCO's P/CF has been as high as 7.63 and as low as 5.42, with a median of 6.54, all within the past year.
Investors could also keep in mind Dave & Buster's Entertainment (PLAY - Free Report) , an Retail - Restaurants stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Dave & Buster's Entertainment is currently trading with a Forward P/E ratio of 11.72 while its PEG ratio sits at 0.68. Both of the company's metrics compare favorably to its industry's average P/E of 25.07 and average PEG ratio of 1.80.
Over the past year, PLAY's P/E has been as high as 16.31, as low as 8.46, with a median of 10.64; its PEG ratio has been as high as 0.81, as low as 0.56, with a median of 1.13 during the same time period.
Additionally, Dave & Buster's Entertainment has a P/B ratio of 6.10 while its industry's price-to-book ratio sits at -24.38. For PLAY, this valuation metric has been as high as 6.18, as low as 3.93, with a median of 4.83 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Arcos Dorados and Dave & Buster's Entertainment are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ARCO and PLAY feels like a great value stock at the moment.