Back to top

Image: Bigstock

Arcos Dorados (ARCO) Suffers a Larger Drop Than the General Market: Key Insights

Read MoreHide Full Article

Arcos Dorados (ARCO - Free Report) closed the latest trading day at $11.74, indicating a -0.68% change from the previous session's end. The stock's change was less than the S&P 500's daily loss of 0.12%. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq lost 0.41%.

Prior to today's trading, shares of the restaurant owner had lost 8.02% over the past month. This has lagged the Retail-Wholesale sector's gain of 1.32% and the S&P 500's gain of 4.83% in that time.

The upcoming earnings release of Arcos Dorados will be of great interest to investors. The company's earnings report is expected on March 13, 2024. The company is predicted to post an EPS of $0.25, indicating a 3.85% decline compared to the equivalent quarter last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Arcos Dorados. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 0.7% fall in the Zacks Consensus EPS estimate. Arcos Dorados is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Arcos Dorados currently has a Forward P/E ratio of 12.57. Its industry sports an average Forward P/E of 21.25, so one might conclude that Arcos Dorados is trading at a discount comparatively.

Meanwhile, ARCO's PEG ratio is currently 0.99. 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 industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Arcos Dorados Holdings Inc. (ARCO) - free report >>

Published in