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Why Arcos Dorados (ARCO) Outpaced the Stock Market Today

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The most recent trading session ended with Arcos Dorados (ARCO - Free Report) standing at $11.25, reflecting a +0.63% shift from the previouse trading day's closing. The stock exceeded the S&P 500, which registered a gain of 0.32% for the day. Elsewhere, the Dow saw an upswing of 0.68%, while the tech-heavy Nasdaq appreciated by 0.2%.

The restaurant owner's shares have seen a decrease of 4.12% over the last month, not keeping up with the Retail-Wholesale sector's gain of 5.25% and the S&P 500's gain of 5.11%.

Investors will be eagerly watching for the performance of Arcos Dorados in its upcoming earnings disclosure.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $0.95 per share and revenue of $4.66 billion, indicating changes of +6.74% and +8.37%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Arcos Dorados. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.35% upward. At present, Arcos Dorados boasts a Zacks Rank of #3 (Hold).

Looking at valuation, Arcos Dorados is presently trading at a Forward P/E ratio of 11.73. This denotes a discount relative to the industry's average Forward P/E of 22.8.

We can also see that ARCO currently has a PEG ratio of 0.92. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Retail - Restaurants industry stood at 1.93 at the close of the market yesterday.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 94, finds itself in the top 38% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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

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