ARCO Stock Analysis: Buy, Sell, or Hold?
ARCO - ARCOS DORADOS HOLDINGS INC.
$8.13
-0.20 (-2.40%)
▼
5d:
-9.87%
30d:
-6.23%
90d:
-2.75%
HOLD
LOW Confidence
Analysis Updated: May 15, 2026 12:00 AM ET
Earnings: May 20, 2026
3d
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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
$16.11
Based on 10.7% avg growth
INTRINSIC VALUE TODAY
$10.01
18.7% 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 11.3x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ARCO is currently trading at $8.13, which is considered oversold relative to its 30-day fair value range of $8.44 to $9.16. From a valuation perspective, the stock is trading at a discount (Forward PE: 9.4) compared to its historical average (11.3). Remarkably, the market is currently pricing in an annual earnings decline of 5.7% over the next few years. This aligns with recent fundamental challenges.
Technical Outlook: Technically, ARCO is in a uptrend. The price is currently testing key support at $8.10. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: The stock shows a mixed technical setup (40/100), with neutral trendline and momentum signals. Wall Street analysts see significant upside, with an average price target of $10.69 (+31.5%). 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 uptrend. The price is currently testing key support at $8.10. A bounce from this level would confirm strength, while a break below could signal further downside.
Market Sentiment: The stock shows a mixed technical setup (40/100), with neutral trendline and momentum signals. Wall Street analysts see significant upside, with an average price target of $10.69 (+31.5%). 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
$8.44 -
$9.16
Company Quality Score
53/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
79.5%
All Signals
- BULLISH: Price oversold vs 30-day range
- NEUTRAL: Mixed technical signals (40/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 31.5% below Wall St target ($10.69)
- CAUTION: Recommendation downgraded due to -9.9% 5-day decline
Trading Range Analysis
30-Day Trading Range
$8.44 -
$9.16
Current vs Trading Range
OVERSOLD
Support & Resistance Levels
Support Level
$8.10
Resistance Level
$9.19
Current Trend
Uptrend
Technical data as of
May 15, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.43
Wall Street Target
$10.69
(+31.5%)
Revenue Growth (YoY)
10.7%
Earnings Growth (YoY)
-56.9%
Profit Margin
4.5%
Valuation Discount vs History
-5.7% cheaper
PE vs Historical
9.4 vs 11.3
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-5.7%
(market-implied from PE analysis)
1-Year Target
$7.67
(-6%)
2-Year Target
$7.23
(-11%)
3-Year Target
$6.82
(-16%)
3-Yr Target (if PE normalizes)
(PE: 9→11)
$8.17
(+0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.1, Growth: 17.4%)
$30.77
(+279%)
Base:
(SPY PE: 9.4, Growth: 17.4%)
$13.15
(+62%)
Bear:
(PE: 8.0, Growth: 17.4%)
$11.18
(+38%)
📈
Valuation based on Current Earnings
Trailing PE: 8.25 | Current EPS (TTM): $1.01
Bull Case
$7.82
(-4%)
Analyst growth -14.7%, PE expands to 9.1
Base Case
$7.11
(-13%)
Market implied -14.7%, PE stable at 8.3
Bear Case
$5.66
(-30%)
Severe decline -20.0%, PE contracts to 7.0
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 11.3
Stabilization Target:
$9.74
(+19.8%)
PE Expansion Potential:
+19.8%
Share & Embed Analysis
Last updated: May 16, 2026 6:11 AM ET
Data refreshes hourly during market hours. Next update: 7:11 AM
Data refreshes hourly during market hours. Next update: 7:11 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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