ARCO Stock Analysis: Buy, Sell, or Hold?
ARCO - ARCOS DORADOS HOLDINGS INC.
$8.00
0.08 (0.95%)
▲
5d:
-1.66%
30d:
-3.56%
90d:
-8.73%
WAIT
LOW Confidence
Analysis Updated: Aug 31, 2026 12:00 AM ET
Earnings: Aug 13, 2026
0d
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Interactive Price Chart (1 Month)
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Bottom Line:
ℹ️ NEUTRAL: ARCO is fairly priced but lacks strong directional signals. At -4.5% expected growth, valuation appears cheap. Wait for clearer setup or better entry on dips.
ℹ️ NEUTRAL: ARCO is fairly priced but lacks strong directional signals. At -4.5% expected growth, valuation appears cheap. Wait for clearer setup or better entry on dips.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$11.74
Based on 5.3% avg growth
INTRINSIC VALUE TODAY
$7.29
Trading above historical range
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 10.6x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ARCO is currently trading at $8.00, which is considered slightly low relative to its 30-day fair value range of $7.89 to $8.30. From a valuation perspective, the stock is trading at a discount (Forward PE: 9.3) compared to its historical average (10.6). Remarkably, the market is currently pricing in an annual earnings decline of 4.5% over the next few years. This pessimistic expectation contrasts with the company's recent 99.3% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, ARCO is in a strong downtrend. The price is approaching resistance at $8.22. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: The stock scores a mixed 54/100 on our bottoming-setup gauge, with only partial signs of a stabilized entry point. Wall Street analysts see significant upside, with an average price target of $11.29 (+42.5%). Current signals suggest waiting for a better entry point before initiating new positions.
Technical Outlook: Technically, ARCO is in a strong downtrend. The price is approaching resistance at $8.22. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: The stock scores a mixed 54/100 on our bottoming-setup gauge, with only partial signs of a stabilized entry point. Wall Street analysts see significant upside, with an average price target of $11.29 (+42.5%). Current signals suggest waiting for a better entry point before initiating new positions.
Quick Decision Summary
Current Position
SLIGHTLY LOW
Historical Trading Range
$7.89 -
$8.30
Company Quality Score
50/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
79.5%
All Signals
- BULLISH: Price oversold vs 30-day range
- NEUTRAL: Mixed technical signals (54/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 42.5% below Wall St target ($11.29)
- WARNING: Composite score 50/100 in the bottom quintile — this cohort historically lags the market
Trading Range Analysis
30-Day Trading Range
$7.89 -
$8.30
Current vs Trading Range
SLIGHTLY LOW
Support & Resistance Levels
Support Level
$7.68
Resistance Level
$8.22
Current Trend
Strong Downtrend
Technical data as of
Aug 31, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.26
Wall Street Target
$11.29
(+42.5%)
Revenue Growth (YoY)
14.3%
Earnings Growth (YoY)
99.3%
Profit Margin
5.2%
Valuation Discount vs History
-4.5% cheaper
PE vs Historical
9.3 vs 10.6
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-4.5%
(market-implied from PE analysis)
1-Year Target
$7.56
(-5%)
2-Year Target
$7.22
(-9%)
3-Year Target
$6.90
(-13%)
3-Yr Target (if PE normalizes)
(PE: 9→11)
$7.90
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 20.1, Growth: 6.6%)
$20.82
(+163%)
Base:
(SPY PE: 9.3, Growth: 6.6%)
$9.59
(+21%)
Bear:
(PE: 7.9, Growth: 6.6%)
$8.15
(+3%)
📈
Valuation based on Current Earnings
Trailing PE: 6.45 | Current EPS (TTM): $1.24
Bull Case
$6.07
(-23%)
Analyst growth -31.0%, PE expands to 7.1
Base Case
$5.52
(-30%)
Market implied -31.0%, PE stable at 6.5
Bear Case
$5.44
(-31%)
Severe decline -20.0%, PE contracts to 5.5
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 10.6
Stabilization Target:
$9.07
(+14.5%)
PE Expansion Potential:
+14.5%
Share & Embed Analysis
Last updated: September 01, 2026 12:18 PM ET
Data refreshes hourly during market hours. Next update: 1:18 PM
Data refreshes hourly during market hours. Next update: 1:18 PM
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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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