ARCO Stock Analysis: Buy, Sell, or Hold?
ARCO - ARCOS DORADOS HOLDINGS INC.
$8.41
0.17 (2.06%)
▲
5d:
+8.24%
30d:
+15.36%
90d:
+17.29%
BUY
MODERATE Confidence
Last Updated: February 3, 2026
Earnings: Mar 11, 2026
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Interactive Price Chart (1 Month)
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Bottom Line:
💡 BUY OPPORTUNITY: ARCO shows positive signals but monitor for confirmation. Market pricing in 3.8% annual growth which appears achievable. Moderate conviction.
💡 BUY OPPORTUNITY: ARCO shows positive signals but monitor for confirmation. Market pricing in 3.8% annual growth which appears achievable. Moderate conviction.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$7.62
Based on 0.4% avg growth
INTRINSIC VALUE TODAY
$4.73
Trading above fair value
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 11.1x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ARCO is currently trading at $8.41, which is considered extended relative to its 30-day fair value range of $7.44 to $8.02. From a valuation perspective, the stock is trading at a premium (Forward PE: 12.4) compared to its historical average (11.1). At these levels, the market is pricing in 3.8% annual earnings growth. This growth rate appears achievable given the company's track record, suggesting the valuation is rational.
Technical Outlook: Technically, ARCO is in a strong uptrend. The price is approaching resistance at $8.50. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: ARCO has a strong technical setup (60/100), with favorable trendlines, momentum, and price action for short-term traders. Wall Street analysts see significant upside, with an average price target of $9.69 (+15.2%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Technical Outlook: Technically, ARCO is in a strong uptrend. The price is approaching resistance at $8.50. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: ARCO has a strong technical setup (60/100), with favorable trendlines, momentum, and price action for short-term traders. Wall Street analysts see significant upside, with an average price target of $9.69 (+15.2%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Quick Decision Summary
Current Position
EXTENDED
Fair Price Range
$7.44 -
$8.02
Company Quality Score
62/100
(BUY)
Volume Confirmation
HIGH
Confidence Score
60.5%
All Signals
- BEARISH: Price extended above range
- BULLISH: Strong technical setup (60/100)
- BULLISH: High volume confirmation
- BULLISH: Trading below Wall St target ($9.69)
- NEUTRAL: Market pricing in 3.8% annual earnings growth - fairly valued
Fair Price Analysis
30-Day Fair Range
$7.44 -
$8.02
Current vs Fair Value
EXTENDED
Support & Resistance Levels
Support Level
$7.43
Resistance Level
$8.50
Current Trend
Strong Uptrend
Fundamental Context
Forward P/E (Next Year Est.)
12.45
Wall Street Target
$9.69
(+15.2%)
Revenue Growth (YoY)
5.2%
Earnings Growth (YoY)
327.2%
Profit Margin
5.4%
Valuation Premium vs History
+3.8% premium
PE vs Historical
12.5 vs 11.1
FAIR
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
+3.8%
(market-implied from PE analysis)
1-Year Target
$8.73
(+4%)
2-Year Target
$9.06
(+8%)
3-Year Target
$9.41
(+12%)
3-Yr Target (if PE normalizes)
(PE: 12→11)
PE COMPRESSION
$8.39
(0%)
Earnings growth offset by PE compression
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.3, Growth: -3.3%)
$13.61
(+62%)
Base:
(SPY PE: 12.4, Growth: -3.3%)
$7.60
(-10%)
Bear:
(PE: 10.6, Growth: -3.3%)
$6.46
(-23%)
📈
Valuation based on Current Earnings
Trailing PE: 7.04 | Current EPS (TTM): $1.17
Bull Case
$5.23
(-38%)
Analyst growth -42.3%, PE expands to 7.8
Base Case
$4.76
(-43%)
Market implied -42.3%, PE stable at 7.0
Bear Case
$5.60
(-33%)
Severe decline -20.0%, PE contracts to 6.0
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
Last updated: February 04, 2026 3:31 AM ET
Data refreshes hourly during market hours. Next update: 4:31 AM
Data refreshes hourly during market hours. Next update: 4:31 AM
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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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ARCO is a key holding in these high-performance investment strategies.
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