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Arcos Dorados (ARCO) Dips More Than Broader Markets: What You Should Know

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Arcos Dorados (ARCO) closed at $6.66 in the latest trading session, marking a -1.62% move from the prior day. This move lagged the S&P 500's daily loss of 0.93%. Meanwhile, the Dow lost 0.43%, and the Nasdaq, a tech-heavy index, lost 0.14%.

Coming into today, shares of the restaurant owner had lost 1.31% in the past month. In that same time, the Retail-Wholesale sector gained 9.23%, while the S&P 500 gained 6.31%.

Arcos Dorados will be looking to display strength as it nears its next earnings release, which is expected to be August 10, 2022. In that report, analysts expect Arcos Dorados to post earnings of $0.04 per share. This would mark year-over-year growth of 33.33%. Meanwhile, our latest consensus estimate is calling for revenue of $702.37 million, up 18.79% from the prior-year quarter.

ARCO's full-year Zacks Consensus Estimates are calling for earnings of $0.44 per share and revenue of $3.09 billion. These results would represent year-over-year changes of +83.33% and +16.58%, respectively.

Investors might also notice recent changes to 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.75% lower within the past month. Arcos Dorados is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Arcos Dorados is holding a Forward P/E ratio of 15.39. This represents a discount compared to its industry's average Forward P/E of 18.

We can also see that ARCO currently has a PEG ratio of 0.45. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Restaurants stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 213, which puts it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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