| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 92 | 6.6x | 17.8x | Top tier | |
Growth | 76 | 10.8% | 7.1% | Top tier | |
Quality | 73 | 7.2% | 4.5% | Top tier | |
Safety | 51 | 3.1x | 2.6x | Around median | |
Capital Return | 80 | 3.00% | 2.12% | Top tier | |
Momentum | 53 | 20.3% | 2.9% | Around median | |
Sentiment | 41 | 5 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Arcos Dorados operates a network of McDonald's restaurants across multiple Latin American markets and generates revenue from restaurant sales through service counters, self-ordering kiosks, delivery, and digital channels. In Q2 fiscal 2026, digital sales represented about 66% of total sales after growing by more than 25% year over year, while sales linked to identified customers exceeded 28% of the total. The company also supports its growth by opening and modernizing restaurants; it opened 16 restaurants during the quarter and 35 restaurants during the first half of fiscal 2026, and the modern restaurant experience reached more than 77% of the portfolio.
Revenue for Q2 fiscal 2026 reached a quarterly record of $1.3 billion, growing by more than 14% year over year, while adjusted earnings before interest, taxes, depreciation, and amortization reached $126.8 million, an increase of more than 20%. The underlying margin expanded by 70 basis points when excluding the Mexican sub-franchisee transaction from the comparison period, and both net income and earnings per share reached their highest Q2 levels, with earnings per share doubling compared with the same period of the prior year. For fiscal 2025, the company reported revenue of $4.7 billion, net income of $212.1 million, and earnings per share of $1.01, compared with $4.5 billion, $148.8 million, and $0.71, respectively, in fiscal 2024.
Brazil was the most prominent driver of the performance mix in Q2 fiscal 2026; its dollar-denominated sales increased by more than 25%, its adjusted earnings before interest, taxes, depreciation, and amortization rose by 43%, equivalent to $23 million, and its margin expanded by 180 basis points to 14.6%. By contrast, the NOLAD margin came under 110 basis points of pressure after excluding restaurant transaction income from the comparison period, while SLAD's adjusted earnings before interest, taxes, depreciation, and amortization grew by 6.6%, or about $3 million, and its margin remained stable near 10%. This mix reflects the strength of the recovery in Brazil, but it also highlights the continuing divergence in consumer and cost conditions across regions.
Automated analysis for informational purposes only — not investment advice.
The analyst consensus rates ARCO shares a “Buy,” with an average price target of $11.53 and a relatively wide range between $9.05 and $14. The average target is above the top of the 52-week range of $9.75, while the lowest target falls within the 52-week range of $6.54 to $9.75, reflecting an overall positive view with meaningful differences in analysts' assessments of execution and growth value. No price-to-earnings ratio is available in the provided data, so the valuation assessment here is based on the target range, the 52-week range, and the improvement in fiscal 2025 net income to $212.1 million.
Figures in the text are as of 2026-09-01; the live price is shown at the top of the page.
Revenue reached $1.3 billion, the company's highest quarterly level, with year-over-year growth exceeding 14%. Adjusted earnings before interest, taxes, depreciation, and amortization reached $126.8 million, an increase of more than 20%, while earnings per share doubled compared with Q2 fiscal 2025. FIFA World Cup campaigns, value platforms, and digital sales growth of more than 25% helped increase visits and sales. Improved food and paper costs and lower general and administrative expenses as a percentage of revenue also contributed to a 70-basis-point expansion in the underlying margin after excluding the Mexico transaction from the comparison period.
Brazil was the company's strongest division in Q2 fiscal 2026, with dollar-denominated sales growth of more than 25%. Adjusted earnings before interest, taxes, depreciation, and amortization increased by 43%, equivalent to $23 million, and the margin expanded by 180 basis points to 14.6%. Performance was supported by the Economia platform, which offers a four-item meal for less than $4, along with McFest, delivery, and FIFA World Cup campaigns. The margin also benefited from improved beef, dairy product, and potato costs and appreciation of the Brazilian real.
Growth combines both paths; digital sales represented about 66% of the total in Q2 fiscal 2026 after growing by more than 25% year over year. Identified sales exceeded 28%, while active loyalty members who redeem points visit restaurants at five times the rate of non-members. On the physical side, the company opened 16 restaurants during the quarter and 35 restaurants during the first half of fiscal 2026. It also spent $49.1 million in capital expenditures during the quarter, and the modern restaurant experience reached more than 77% of the portfolio.
The NOLAD margin declined by 110 basis points in Q2 fiscal 2026 after excluding restaurant transaction income from the comparison period due to weak operating leverage. In SLAD, weighted inflation reached 46% to 47%, while sales remained slightly below or in line with inflation, and the margin was stable near 10%. Argentina also faced higher food and paper costs, with the company remaining cautious about raising prices due to weak consumption. In Brazil, future gains may be affected by exchange-rate changes or renewed pressure on commodities such as beef.
Net leverage stood at 1.1 times at the end of Q2 fiscal 2026, following growth in adjusted earnings during the twelve months ended that quarter. In July 2026, the company completed its second liability management transaction during fiscal 2026, resulting in the full repayment of the senior notes due in 2029. Capital expenditures totaled $49.1 million in the quarter and about $86 million during the first half of fiscal 2026. Management said investment cost per store declined by between 15% and 20%, while company-operated restaurants remained more than 65% of first-half openings.
The provided consensus indicates a “Buy” recommendation and an average price target of $11.53. Analysts' estimates range between $9.05 and $14, illustrating differences in growth and margin assumptions. The average target exceeds the top of the 52-week range of $9.75, while the lowest target falls within the range of $6.54 to $9.75. The provided data does not include a price-to-earnings ratio, so the valuation should be linked to fiscal 2025 performance, when net income reached $212.1 million and earnings per share reached $1.01.
