ARCO Stock Analysis: Buy, Sell, or Hold?
ARCO - ARCOS DORADOS HOLDINGS INC.
$8.11
-0.19 (-2.29%)
▼
5d:
-7.63%
30d:
-11.37%
90d:
+1.12%
HOLD
MODERATE Confidence
Analysis Updated: Jun 23, 2026 12:00 AM ET
Earnings: Aug 12, 2026
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Interactive Price Chart (1 Month)
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Bottom Line:
📊 HOLD: ARCO shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.
📊 HOLD: ARCO shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$13.14
Based on 6.8% avg growth
INTRINSIC VALUE TODAY
$8.16
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 11.0x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ARCO is currently trading at $8.11, which is considered oversold relative to its 30-day fair value range of $8.25 to $8.86. From a valuation perspective, the stock is trading at a discount (Forward PE: 9.4) compared to its historical average (11.0). Remarkably, the market is currently pricing in an annual earnings decline of 5.1% 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 $8.11. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: ARCO has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. Wall Street analysts see significant upside, with an average price target of $11.15 (+37.5%). The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.
Technical Outlook: Technically, ARCO is in a downtrend. The price is currently testing key support at $8.11. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: ARCO has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. Wall Street analysts see significant upside, with an average price target of $11.15 (+37.5%). The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.
Quick Decision Summary
Current Position
OVERSOLD
Historical Trading Range
$8.25 -
$8.86
Company Quality Score
54/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
57.1%
All Signals
- BULLISH: Price oversold vs 30-day range
- BEARISH: Weak technical setup (25/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 37.5% below Wall St target ($11.15)
- CAUTION: 5-day price weakness (-7.6%) - monitor closely
Trading Range Analysis
30-Day Trading Range
$8.25 -
$8.86
Current vs Trading Range
OVERSOLD
Support & Resistance Levels
Support Level
$8.11
Resistance Level
$9.07
Current Trend
Downtrend
Technical data as of
Jun 23, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.42
Wall Street Target
$11.15
(+37.5%)
Revenue Growth (YoY)
12.9%
Earnings Growth (YoY)
159.4%
Profit Margin
4.9%
Valuation Discount vs History
-5.1% cheaper
PE vs Historical
9.4 vs 11.0
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-5.1%
(market-implied from PE analysis)
1-Year Target
$7.70
(-5%)
2-Year Target
$7.30
(-10%)
3-Year Target
$6.93
(-15%)
3-Yr Target (if PE normalizes)
(PE: 9→11)
$8.09
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 21.8, Growth: 9.6%)
$24.70
(+205%)
Base:
(SPY PE: 9.4, Growth: 9.6%)
$10.69
(+32%)
Bear:
(PE: 8.0, Growth: 9.6%)
$9.08
(+12%)
📈
Valuation based on Current Earnings
Trailing PE: 7.48 | Current EPS (TTM): $1.11
Bull Case
$7.08
(-13%)
Analyst growth -22.5%, PE expands to 8.2
Base Case
$6.44
(-21%)
Market implied -22.5%, PE stable at 7.5
Bear Case
$5.64
(-30%)
Severe decline -20.0%, PE contracts to 6.4
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 9.4 to 11.0
Stabilization Target:
$9.47
(+16.7%)
PE Expansion Potential:
+16.7%
Share & Embed Analysis
Last updated: June 23, 2026 6:30 PM ET
Data refreshes hourly during market hours. Next update: 7:30 PM
Data refreshes hourly during market hours. Next update: 7:30 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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