Why Investors Shouldn't Be Surprised By Arcos Dorados Holdings Inc.'s (NYSE:ARCO) Low P/E

Simply Wall St.00:18

When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") above 20x, you may consider Arcos Dorados Holdings Inc. (NYSE:ARCO) as an attractive investment with ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2486035030?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/industry/4214000-choice2-main-header/1585186565403","is_english":true,"pubTime":"2024-11-26 00:18","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2486035030","market":"sg","top_or_hot":-1,"title":"Why Investors Shouldn't Be Surprised By Arcos Dorados Holdings Inc.'s (NYSE:ARCO) Low P/E","media":"Simply Wall St.","content":"<div>\n<p>When close to half the companies in the United States have price-to-earnings ratios (or \"P/E's\") above 20x, you may consider Arcos Dorados Holdings Inc. (NYSE:ARCO) as an attractive investment with ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/consumer-services/nyse-arco/arcos-dorados-holdings/news/why-investors-shouldnt-be-surprised-by-arcos-dorados-holding\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why Investors Shouldn't Be Surprised By Arcos Dorados Holdings Inc.'s (NYSE:ARCO) Low P/E</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy Investors Shouldn't Be Surprised By Arcos Dorados Holdings Inc.'s (NYSE:ARCO) Low P/E\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-26 00:18 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/consumer-services/nyse-arco/arcos-dorados-holdings/news/why-investors-shouldnt-be-surprised-by-arcos-dorados-holding><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>When close to half the companies in the United States have price-to-earnings ratios (or \"P/E's\") above 20x, you may consider Arcos Dorados Holdings Inc. (NYSE:ARCO) as an attractive investment with ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/consumer-services/nyse-arco/arcos-dorados-holdings/news/why-investors-shouldnt-be-surprised-by-arcos-dorados-holding\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4209","symbol_name":"餐馆","start_time":0,"source_url":"https://simplywall.st/stocks/us/consumer-services/nyse-arco/arcos-dorados-holdings/news/why-investors-shouldnt-be-surprised-by-arcos-dorados-holding","article_id":"2486035030","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4214000-choice2-main-header/1585186565403"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2486035030","pubTimestamp":1732551480,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"When close to half the companies in the United States have price-to-earnings ratios (or \"P/E's\") above 20x, you may...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4209":"餐馆","BK4211":"区域性银行","NYSE":"纽交所","ARCO":"Arcos Dorados Holdings","ISBC":"投资者银行"},"translate_title":"为什么投资者不应该对Arcos Dorados Holdings Inc.（纽约证券交易所股票代码：ARCO）的低市盈率感到惊讶","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ARCO":1,"ISBC":1,"NYSE":1},"content_text":"When close to half the companies in the United States have price-to-earnings ratios (or \"P/E's\") above 20x, you may consider Arcos Dorados Holdings Inc. (NYSE:ARCO) as an attractive investment with its 12.1x P/E ratio.  Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/E.     While the market has experienced earnings growth lately, Arcos Dorados Holdings' earnings have gone into reverse gear, which is not great.   The P/E is probably low because investors think this poor earnings performance isn't going to get any better.  If this is the case, then existing shareholders will probably struggle to get excited about the future direction of the share price.     See our latest analysis for Arcos Dorados Holdings NYSE:ARCO Price to Earnings Ratio vs Industry November 25th 2024 Want the full picture on analyst estimates for the company? Then our free report on Arcos Dorados Holdings will help you uncover what's on the horizon.   Does Growth Match The Low P/E?   In order to justify its P/E ratio, Arcos Dorados Holdings would need to produce sluggish growth that's trailing the market.   If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 19%.   Still, the latest three year period has seen an excellent 564% overall rise in EPS, in spite of its unsatisfying short-term performance.  So we can start by confirming that the company has generally done a very good job of growing earnings over that time, even though it had some hiccups along the way.     Turning to the outlook, the next year should generate growth of 12%  as estimated by the eight analysts watching the company.  That's shaping up to be materially lower than the 15% growth forecast for the broader market.  In light of this, it's understandable that Arcos Dorados Holdings' P/E sits below the majority of other companies.  Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.    The Key Takeaway  We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.  We've established that Arcos Dorados Holdings maintains its low P/E on the weakness of its forecast growth being lower than the wider market, as expected.  Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises.  Unless these conditions improve, they will continue to form a barrier for the share price around these levels.      You need to take note of risks, for example - Arcos Dorados Holdings has 3 warning signs   (and 1 which shouldn't be ignored) we think you should know about.   Of course, you might also be able to find a better stock than Arcos Dorados Holdings. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly. New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2486035030"}