Back to top

Image: Bigstock

Arcos Dorados (ARCO) Stock Sinks As Market Gains: Here's Why

Read MoreHide Full Article

In the latest market close, Arcos Dorados (ARCO - Free Report) reached $10.63, with a -1.3% movement compared to the previous day. The stock's change was less than the S&P 500's daily gain of 1.11%. On the other hand, the Dow registered a gain of 0.8%, and the technology-centric Nasdaq increased by 1.24%.

The the stock of restaurant owner has fallen by 6.91% in the past month, lagging the Retail-Wholesale sector's loss of 0.73% and the S&P 500's gain of 0.48%.

Analysts and investors alike will be keeping a close eye on the performance of Arcos Dorados in its upcoming earnings disclosure.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.95 per share and a revenue of $4.62 billion, indicating changes of +6.74% and +7.55%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for Arcos Dorados. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.35% higher within the past month. Right now, Arcos Dorados possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Arcos Dorados is presently trading at a Forward P/E ratio of 11.3. This expresses a discount compared to the average Forward P/E of 21.63 of its industry.

One should further note that ARCO currently holds a PEG ratio of 0.89. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Retail - Restaurants industry held an average PEG ratio of 1.77.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 92, positioning it in the top 37% of all 250+ industries.

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

To follow ARCO in the coming trading sessions, be sure to utilize

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