Arcos Dorados Intrinsic Value – Arcos Dorados Reports Record-Breaking Earnings and Revenue Growth
May 18, 2023
Trending News ☀️
Arcos Dorados ($NYSE:ARCO), the world’s largest McDonald’s franchisee, recently reported record-breaking earnings and revenue growth. Despite the challenging market conditions, the company managed to achieve impressive results with its GAAP EPS of $0.18, which exceeded expectations by $0.05, and its revenue of $990.79M, which surpassed the forecast by $38.11M. Arcos Dorados is a publicly traded company listed on the New York Stock Exchange (NYSE) under the symbol ARCO.
The company is a leading Latin American fast-food restaurant chain that operates McDonald’s outlets throughout Latin America and the Caribbean. It is the exclusive franchise operator for McDonald’s in the countries of Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, French Guiana, Guadeloupe, Martinique, Panama, Peru, Puerto Rico, Uruguay, and Venezuela.
Earnings
ARCOS DORADOS recently released its FY2022 Q4 financial report as of December 31 2022, showing a record-breaking performance in both revenue and income growth. According to the report, total revenue earned reached an impressive 1018.62M USD, a 30.5% increase compared to the previous year. Net income also rose significantly, with a 19.6% increase to 54.49M USD.
Further, total revenue has seen a huge surge over the last 3 years, leaping from 607.39M USD to 1018.62M USD. These impressive earnings demonstrate the continuing success of ARCOS DORADOS.
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 |
| 3.38k | 45.49 | 2.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Arcos Dorados. More…
| Operations | Investing | Financing |
| 345.44 | -259.65 | -59.98 |
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 |
| 2.64k | 2.31k | 1.54 |
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 |
| 4.5% | 17.7% | 4.8% |
| FCF Margin | ROE | ROA |
| 3.8% | 38.1% | 3.4% |
Stock Price
On Wednesday, ARCOS DORADOS stock opened at $8.9 and closed at $9.1, a rise of 8.3% from the prior closing price of $8.4. These results demonstrate the continued success of Arcos Dorados and are a reflection of the company’s commitment to providing quality products to customers and its ability to maintain strong financial performance in spite of the challenges posed by the pandemic. Live Quote…
Analysis – Arcos Dorados Intrinsic Value
At GoodWhale, we have done an in-depth analysis of ARCOS DORADOS’s financials and determined that the fair value of the company’s share is around $8.2. This was calculated through our proprietary Valuation Line. Currently, ARCOS DORADOS’s stock is traded at $9.1, which is a fair price, albeit slightly overvalued by 11.6%. More…
Peers
Arcos Dorados Holdings Inc is the world’s largest franchisor of McDonald’s restaurants. The company operates or franchises over 1,700 McDonald’s restaurants in 20 countries and territories in Latin America and the Caribbean. Arcos Dorados is headquartered in Buenos Aires, Argentina. The company’s primary competitors are Del Taco Restaurants Inc, Amrest Holdings SE, and Alsea SAB de CV.
– Del Taco Restaurants Inc ($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 is a Latin American restaurant chain franchisee of McDonald’s and is the world’s largest McDonald’s franchisee. Recently, the company reported better than expected earnings for the second quarter with EPS beating estimates by $0.05, and revenues beating estimates by $38.11M. This news immediately caused the stock price to move up the same day, making it a great investment opportunity.
Analysts believe that the company’s management team has done an excellent job in executing their strategies and expanding their business in the Latin American market which is expected to drive their profits going forward. Investors should pay attention to how the company is performing in terms of sales and profitability as well as their strategies for expansion in order to make an informed decision on whether to invest.
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