Arcos Dorados Holdings Inc (ARCO) Fair Value & Analysis
Consumer Cyclical · US · Market cap $1.8B · ISIN VGG0457F1071
What is Arcos Dorados Holdings Inc really worth?
Arcos Dorados Holdings Inc
ARCO · US
Below-average quality, trading 36% below our fair value of $12.84.
Strengths
Risks
For context
Fair value as of: Aug 27, 2026
From 23 valuation models · updated 8 days ago
Share price −1.1% over the past month.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
What matters now
- The model range is unusually wide ($6.40 to $24.21). The outcome hinges heavily on assumptions, so read the point estimate with caution.
- Solid quality (46/100) at a price below fair value, the discount is the argument here, not the business quality.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 27, 2026.
How to read this chart
60‑month range $3.96 – $12.12 · fair‑value band $6.40 – $24.21 · the $8.25 price screens below the $12.84 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Aug 27, 2026.
Analysis
Arcos Dorados Holdings Inc (ARCO) currently trades at $8.25, while our model-based Fair Value estimate is $12.84, implying the stock looks roughly 35.7% undervalued today. The Quality Score stands at 46/100 (below-average quality), in the Consumer Cyclical sector. Bull case: the Growth Earnings group reads highest at a median of $18.63 per share, and 12 of the 23 models we run sit above the $8.25 price. Bear case: the Asset-Based group reads lowest at $2.45, and 11 of the 23 models stay below the price. Evidence for this calculation is high.
Over the trailing twelve months, Arcos Dorados Holdings Inc generated revenue of $4.8B at a net margin of 4.9%. Revenue grew 12.9% year over year. It earns a return on equity of 36.3%. Net debt stands at $1.9B. Fundamentals as of Aug 27, 2026
Our scenario range runs from $6.40 (bear case) to $24.21 (bull case); at $8.25, the current price sits within that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 15% below its 52-week high and 30% above its 52-week low, currently above its 200-day average. For context, the median of 10 Consumer Cyclical peers we cover trades at −47% fair-value upside, at 56%, ARCO screens cheaper than that median.
Fair Value models
This estimate rests on fiscal year 2025 figures, and about 8 months have passed since. In that time the company retained roughly $0.5639 per share, which is 4.4 % of the fair value. The fair value deliberately does not add this in: the models value reported figures, not a projection.
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.
All 23 models by family
Widest divergence: Growth Earnings ($18.63) versus Asset-Based ($2.45). Highest evidence: Owner Earnings (73).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Aug 27, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 45 · Market factors (momentum, volatility) 63
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
About the company
Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald's restaurants in 21 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, …
Full company description
Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's restaurants. It has the exclusive right to own, operate, and grant franchises of McDonald's restaurants in 21 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Trinidad and Tobago, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela. Arcos Dorados Holdings Inc. was founded in 2007 and is based in Montevideo, Uruguay.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2021 – FY2025 · reported fiscal years
Arcos Dorados Holdings Inc reported revenue of $4.7B in FY2025 versus $2.7B in FY2021, a compound +15.2%/yr. Reported net income was $212M in FY2025, compounding +47.0%/yr from FY2021. FY2021 was a trough year, so the rate overstates the trend.
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Peer Group
Restaurants · 220 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs Restaurants median · lower = cheaper
Strength profile in five axes (Snowflake)
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
Insider activity: 40/100
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
Similar stocks
10 more Restaurants stocks, each showing price versus our Fair Value estimate (as of Aug 27, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| McDonald's Corporation MCD | $260.06 | $149.03 | −43% |
| Starbucks Corporation SBUX | $107.26 | $35.83 | −67% |
| Chipotle Mexican Grill, Inc CMG | $38.03 | $17.92 | −53% |
| Yum! Brands, Inc YUM | $153.31 | $58.17 | −62% |
| Restaurant Brands International Inc QSR | C$104.50 | C$36.37 | −65% |
| Darden Restaurants, Inc DRI | $218.86 | $173.68 | −21% |
| Yum China Holdings YUMC | $47.18 | $54.27 | +15% |
| Texas Roadhouse, Inc TXRH | $198.99 | $104.89 | −47% |
| Dutch Bros Inc BROS | $51.02 | $12.80 | −75% |
| Domino's Pizza, Inc DPZ | $332.06 | $227.31 | −32% |
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