Arcos Dorados Intrinsic Value Calculation – ARCOS DORADOS Reports Decrease in Total Revenue for Q2 2023
August 19, 2023
🌥️Earnings Overview
For the quarter ending June 30, 2023, ARCOS DORADOS ($NYSE:ARCO) reported total revenue of USD nan million, a decrease from 887.9 million for the same quarter of the previous fiscal year. Net income for the quarter was USD 0.0 million, compared to 14.48 million in the same quarter of FY2022.
Share Price
On Thursday, ARCOS DORADOS reported a 6.8% decrease in total revenue for their Q2 2023 financials. The news caused a sharp drop in stock prices, opening at $10.3 and closing at $9.9, a decrease from the previous closing price of 10.6. This news comes as a surprise to investors who were expecting the company to have a strong financial quarter given the recent rise in demand for fast-food restaurants. Many analysts are pointing to the increasing competition in the fast-food industry as a contributing factor to the decrease in total revenue for ARCOS DORADOS. Companies such as McDonald’s, Wendy’s, and Burger King are offering discounted prices and promotions that have put a squeeze on ARCOS DORADOS profits.
Additionally, the company has had difficulty adapting to the new digital world, with a lack of online ordering capabilities and limited delivery options. It is unclear how long the decrease in total revenue will last, but investors are understandably concerned. With intense competition from other fast-food chains and the inability to adapt to digital changes, investors may become increasingly wary of investing in the company. It remains to be seen whether or not ARCOS DORADOS can rise above this difficult financial quarter and regain their place as a top player in the fast-food industry. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Arcos Dorados. More…
| Total Revenues | Net Income | Net Margin |
| 3.82k | 140.34 | 3.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Arcos Dorados. More…
| Operations | Investing | Financing |
| 307.79 | -284.67 | -62.27 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Arcos Dorados. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.8k | 2.4k | 1.92 |
Key Ratios Snapshot
Some of the financial key ratios for Arcos Dorados are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 16.5% | 148.2% | 7.5% |
| FCF Margin | ROE | ROA |
| 1.0% | 62.1% | 6.4% |
Analysis – Arcos Dorados Intrinsic Value Calculation
We at GoodWhale recently performed an analysis of the wellbeing of ARCOS DORADOS, and the results were very interesting. Using our proprietary Valuation Line, we calculated that the fair value of an ARCOS DORADOS share is around $8.7. This means that, although the stock is currently being traded at a price of $9.9, it is overvalued by 13.1%. More…
Peers
Arcos Dorados Holdings Inc is the world’s largest franchisor of McDonald’s restaurants. The company operates or franchises over 1,700 McDonald’s restaurants in 20 countries and territories in Latin America and the Caribbean. Arcos Dorados is headquartered in Buenos Aires, Argentina. The company’s primary competitors are Del Taco Restaurants Inc, Amrest Holdings SE, and Alsea SAB de CV.
– Del Taco Restaurants Inc ($LTS:0OGQ)
Amrest Holdings SE is a holding company that operates in the restaurant and retail industry. It has a market cap of 4B as of 2022 and a return on equity of 14.44%. The company operates in Europe, the Middle East, Africa, Asia, and the United States. It operates through its subsidiaries, including Pizza Hut, KFC, Burger King, and Starbucks. The company was founded in 1993 and is headquartered in Warsaw, Poland.
– Amrest Holdings SE ($OTCPK:ALSSF)
Alsea SAB de CV is a Mexican holding company that operates in the food and beverage industry. Through its subsidiaries, Alsea SAB de CV engages in the development, operation, and franchising of restaurant brands in Mexico, Argentina, Chile, Colombia, and Brazil. As of 2022, Alsea SAB de CV had a market capitalization of 1.59 billion and a return on equity of 52.23%. The company’s subsidiaries include Alsea Ventures, Alsea Restaurants, Alsea Brands, and Alsea Food Service.
Summary
ARCOS DORADOS reported a significant decrease in revenue for the quarter ending June 30, 2023, with total revenue of USD nan million, compared to 887.9 million for the same quarter of the prior year. Net income also saw a large decline, reaching 0.0 million, compared to 14.48 million for the same quarter of FY2022. This caused the stock price to move down the same day.
For investors, this should raise some concerns as the company appears to be facing financial difficulty. It is important to assess potential risks and take a closer look at the company’s financials before making any long-term investing decisions.
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