ARCO Stock Analysis: Buy, Sell, or Hold?
ARCO - ARCOS DORADOS HOLDINGS INC.
$7.91
-0.16 (-1.98%)
▼
5d:
-5.16%
30d:
-4.58%
90d:
-8.45%
WAIT
LOW Confidence
Analysis Updated: Aug 11, 2026 12:00 AM ET
Earnings: Aug 13, 2026
TODAY
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Interactive Price Chart (1 Month)
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Bottom Line:
📊 MIXED SIGNALS: ARCO shows conflicting indicators. Wait for confirmation before entering.
📊 MIXED SIGNALS: ARCO shows conflicting indicators. Wait for confirmation before entering.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$12.81
Based on 7.0% avg growth
INTRINSIC VALUE TODAY
$7.95
0.6% Margin of Safety
How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 10.7x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ARCO is currently trading at $7.91, which is considered oversold relative to its 30-day fair value range of $8.15 to $8.38. From a valuation perspective, the stock is trading at a discount (Forward PE: 9.3) compared to its historical average (10.7). Remarkably, the market is currently pricing in an annual earnings decline of 4.7% over the next few years. This pessimistic expectation contrasts with the company's recent 159.4% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, ARCO is in a downtrend. The price is currently testing key support at $7.89. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: ARCO scores 31/100 on our bottoming-setup gauge. Note this measures entry quality, not trend direction — a low score can mean the chart is extended after a strong run (don't chase) or still falling without stabilization; better entries typically come after a pullback toward the 20-day average. Wall Street analysts see significant upside, with an average price target of $11.29 (+42.8%). Current signals suggest waiting for a better entry point before initiating new positions.
Technical Outlook: Technically, ARCO is in a downtrend. The price is currently testing key support at $7.89. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: ARCO scores 31/100 on our bottoming-setup gauge. Note this measures entry quality, not trend direction — a low score can mean the chart is extended after a strong run (don't chase) or still falling without stabilization; better entries typically come after a pullback toward the 20-day average. Wall Street analysts see significant upside, with an average price target of $11.29 (+42.8%). Current signals suggest waiting for a better entry point before initiating new positions.
Quick Decision Summary
Current Position
OVERSOLD
Historical Trading Range
$8.15 -
$8.38
Company Quality Score
32/100
(SELL)
Volume Confirmation
HIGH
Confidence Score
57.1%
All Signals
- BULLISH: Price oversold vs 30-day range
- BEARISH: Weak technical setup (31/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 42.8% below Wall St target ($11.29)
- WARNING: Composite score 32/100 in the bottom quintile — this cohort historically lags the market
Trading Range Analysis
30-Day Trading Range
$8.15 -
$8.38
Current vs Trading Range
OVERSOLD
Support & Resistance Levels
Support Level
$7.89
Resistance Level
$8.55
Current Trend
Downtrend
Technical data as of
Aug 11, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.28
Wall Street Target
$11.29
(+42.8%)
Revenue Growth (YoY)
12.9%
Earnings Growth (YoY)
159.4%
Profit Margin
4.9%
Valuation Discount vs History
-4.7% cheaper
PE vs Historical
9.3 vs 10.7
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-4.7%
(market-implied from PE analysis)
1-Year Target
$7.54
(-5%)
2-Year Target
$7.18
(-9%)
3-Year Target
$6.85
(-13%)
3-Yr Target (if PE normalizes)
(PE: 9→11)
$7.90
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 20.2, Growth: 10.1%)
$23.00
(+191%)
Base:
(SPY PE: 9.3, Growth: 10.1%)
$10.55
(+33%)
Bear:
(PE: 7.9, Growth: 10.1%)
$8.97
(+13%)
📈
Valuation based on Current Earnings
Trailing PE: 7.40 | Current EPS (TTM): $1.09
Bull Case
$6.94
(-12%)
Analyst growth -21.8%, PE expands to 8.1
Base Case
$6.31
(-20%)
Market implied -21.8%, PE stable at 7.4
Bear Case
$5.49
(-31%)
Severe decline -20.0%, PE contracts to 6.3
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
💡
Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 9.3 to 10.7
Stabilization Target:
$9.12
(+15.3%)
PE Expansion Potential:
+15.3%
Share & Embed Analysis
Last updated: August 11, 2026 10:20 PM ET
Data refreshes hourly during market hours. Next update: 11:20 PM
Data refreshes hourly during market hours. Next update: 11:20 PM
🔥 Top Stocks Breaking Out Now
| Ticker | Score | Recommendation | Change % |
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Technical Signals Check
Is ARCO showing a specific setup today?
Insider Activity (6 Months)
0
Buys
0
Sells
0
Net
NEUTRAL
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