MODEL VERDICT
Arcos Dorados Holdings Inc. (ARCO)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | MODERATE | 0.61 | $8.78 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.61 | $9.23 | CURRENT | — |
| Apr 17, 2026 | MODERATE | 0.61 | $8.96 | CURRENT | — |
| Apr 16, 2026 | MODERATE | 0.61 | $8.56 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.61 | $8.50 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 6 analyst estimates | $14.35 | +63.4% | 20% | A- | Analyst Est. |
| EV/EBITDA 6 industry peers | $52.88 | +502.3% | 20% | A- | Peer Data |
| Industry Median P/E 6 industry peers | $24.67 | +181.0% | 15% | A | Peer Data |
| EV/EBIT 6 industry peers | $35.95 | +309.5% | 8% | B+ | Peer Data |
| EV To Revenue 6 industry peers | $115.11 | +1211.0% | 4% | B | Data |
| Price / Sales 6 industry peers | $94.70 | +978.6% | 3% | B | Model Driven |
| Earnings Yield 6 industry peers | $24.61 | +180.3% | 2% | B | Data |
| Weighted Output Blended model output | $36.23 | +312.7% | 100% | 59 | SIGNIFICANTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 5× | 7× | 9× (Current) | 11× | 13× |
|---|---|---|---|---|---|
| Bear Case (4%) | $5 | $7 | $9 | $12 | $14 |
| Conservative (7%) | $5 | $8 | $10 | $12 | $14 |
| Base Case (10.0%) | $6 | $8 | $10 | $12 | $14 |
| Bull Case (14%) | $6 | $8 | $10 | $13 | $15 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 15.38 | 13.62 | 7.27 | 26.50 | 7.16 |
| EV/EBIT | 13.54 | 12.39 | 9.13 | 19.47 | 4.41 |
| EV/EBITDA | 13.02 | 8.99 | 6.21 | 41.14 | 12.52 |
| P/FCF | 48.18 | 13.72 | 8.58 | 122.23 | 64.18 |
| P/FFO | 6.50 | 7.08 | 3.78 | 8.28 | 1.85 |
| P/TBV | 5.15 | 5.98 | 2.48 | 6.73 | 1.69 |
| P/B Ratio | 4.34 | 5.17 | 2.00 | 5.55 | 1.38 |
| Div Yield | 0.02 | 0.01 | 0.00 | 0.03 | 0.01 |
| P/S Ratio | 0.48 | 0.49 | 0.33 | 0.62 | 0.11 |
Based on our peer multiples analysis with 19 valuation metrics, the model estimates ARCO's fair value at $36.23 vs the current price of $8.78, implying +312.7% upside potential. Model verdict: Significantly Undervalued. Confidence: 59/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $36.23 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $27.25 (P10) to $43.89 (P90), with a median of $34.44.
ARCO's current P/E of 8.7x compares to the industry median of 24.4x (6 peers in the group). This represents a -64.4% discount to the industry. The historical average P/E is 15.4x over 6 years. Signal: Deep Discount.
12 analysts cover ARCO with a consensus rating of Buy. The consensus price target is $11.53 (range: $9.05 — $14.00), implying +31.3% upside from the current price. Grade breakdown: Strong Buy (0), Buy (8), Hold (3), Sell (1), Strong Sell (0).
The model confidence score is 59/100, based on: data completeness (18), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: --10 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that ARCO's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.5σ, meaning margins are 0.5 standard deviations above their historical average. If margins revert to the 6-year mean (5.1%), the model estimates fair value drops by 9780.0% to approximately $17. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.