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Arcos Dorados (ARCO) Stock Sinks As Market Gains: What You Should Know

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Arcos Dorados (ARCO) closed at $6.86 in the latest trading session, marking a -1.15% move from the prior day. This change lagged the S&P 500's daily gain of 0.95%. Meanwhile, the Dow gained 0.64%, and the Nasdaq, a tech-heavy index, added 0.12%.

Coming into today, shares of the restaurant owner had lost 6.85% in the past month. In that same time, the Retail-Wholesale sector gained 2.16%, while the S&P 500 lost 3.49%.

Wall Street will be looking for positivity from Arcos Dorados as it approaches its next earnings report date. On that day, Arcos Dorados is projected to report earnings of $0.04 per share, which would represent 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.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.44 per share and revenue of $3.09 billion. These totals would mark changes of +83.33% and +16.58%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Arcos Dorados. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Arcos Dorados currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Arcos Dorados has a Forward P/E ratio of 15.65 right now. For comparison, its industry has an average Forward P/E of 17.49, which means Arcos Dorados is trading at a discount to the group.

Meanwhile, ARCO's PEG ratio is currently 0.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Restaurants stocks are, on average, holding a PEG ratio of 1.72 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 182, putting it in the bottom 29% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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