ARCO Stock Analysis: Buy, Sell, or Hold?
ARCO - ARCOS DORADOS HOLDINGS INC.
$8.23
0.19 (2.36%)
▲
5d:
+1.23%
30d:
-6.05%
90d:
-1.44%
HOLD
MODERATE Confidence
Analysis Updated: Jul 2, 2026 12:00 AM ET
Earnings: Aug 12, 2026
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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
$13.02
Based on 6.8% avg growth
INTRINSIC VALUE TODAY
$8.09
Trading above historical range
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 10.9x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ARCO is currently trading at $8.23, which is considered slightly low relative to its 30-day fair value range of $8.25 to $8.82. From a valuation perspective, the stock is trading at a discount (Forward PE: 9.6) compared to its historical average (10.9). Remarkably, the market is currently pricing in an annual earnings decline of 4.4% over the next few years. This pessimistic expectation contrasts with the company's recent 159.4% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, ARCO is in a downtrend. Immediate support is located at $7.98, while resistance sits at $8.82.
Market Sentiment: ARCO has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. Wall Street analysts see significant upside, with an average price target of $11.15 (+35.5%). 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 downtrend. Immediate support is located at $7.98, while resistance sits at $8.82.
Market Sentiment: ARCO has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. Wall Street analysts see significant upside, with an average price target of $11.15 (+35.5%). 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
SLIGHTLY LOW
Historical Trading Range
$8.25 -
$8.82
Company Quality Score
54/100
(HOLD)
Volume Confirmation
HIGH
Confidence Score
57.1%
All Signals
- BULLISH: Price oversold vs 30-day range
- BEARISH: Weak technical setup (25/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 35.5% below Wall St target ($11.15)
Trading Range Analysis
30-Day Trading Range
$8.25 -
$8.82
Current vs Trading Range
SLIGHTLY LOW
Support & Resistance Levels
Support Level
$7.98
Resistance Level
$8.82
Current Trend
Downtrend
Technical data as of
Jul 2, 2026
Fundamental Context
Forward P/E (Next Year Est.)
9.56
Wall Street Target
$11.15
(+35.5%)
Revenue Growth (YoY)
12.9%
Earnings Growth (YoY)
159.4%
Profit Margin
4.9%
Valuation Discount vs History
-4.4% cheaper
PE vs Historical
9.6 vs 10.9
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-4.4%
(market-implied from PE analysis)
1-Year Target
$7.87
(-4%)
2-Year Target
$7.52
(-9%)
3-Year Target
$7.19
(-13%)
3-Yr Target (if PE normalizes)
(PE: 10→11)
$8.20
(0%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 21.8, Growth: 9.6%)
$24.70
(+200%)
Base:
(SPY PE: 9.6, Growth: 9.6%)
$10.84
(+32%)
Bear:
(PE: 8.1, Growth: 9.6%)
$9.22
(+12%)
📈
Valuation based on Current Earnings
Trailing PE: 7.24 | Current EPS (TTM): $1.11
Bull Case
$6.86
(-17%)
Analyst growth -22.5%, PE expands to 8.0
Base Case
$6.23
(-24%)
Market implied -22.5%, PE stable at 7.2
Bear Case
$5.47
(-34%)
Severe decline -20.0%, PE contracts to 6.2
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 9.6 to 10.9
Stabilization Target:
$9.38
(+14.0%)
PE Expansion Potential:
+14.0%
Share & Embed Analysis
Last updated: July 03, 2026 6:55 PM ET
Data refreshes hourly during market hours. Next update: 7:55 PM
Data refreshes hourly during market hours. Next update: 7:55 PM
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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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