Arcos Dorados (ARCO) Stock Sinks As Market Gains: Here's Why
In the latest trading session, Arcos Dorados (ARCO) closed at $8.92, marking a -1% move from the previous day. This change lagged the S&P 500's daily gain of 1.18%. Elsewhere, the Dow saw an upswing of 0.87%, while the tech-heavy Nasdaq appreciated by 1.6%.
The restaurant owner's stock has dropped by 6.83% in the past month, falling short of the Retail-Wholesale sector's loss of 6.82% and the S&P 500's loss of 5.17%.
The investment community will be closely monitoring the performance of Arcos Dorados in its forthcoming earnings report. The company's upcoming EPS is projected at $0.20, signifying a 13.04% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.07 billion, indicating a 16.91% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.78 per share and a revenue of $4.29 billion, indicating changes of +13.04% and +19.22%, respectively, from the former year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Arcos Dorados. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Arcos Dorados boasts a Zacks Rank of #1 (Strong Buy).
With respect to valuation, Arcos Dorados is currently being traded at a Forward P/E ratio of 11.55. This expresses a discount compared to the average Forward P/E of 19.5 of its industry.
We can also see that ARCO currently has a PEG ratio of 1.02. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 1.67 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 101, positioning it in the top 41% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report
