The time has not yet come to remove your chips from the table: Arcos Dorados Holdings Inc. (ARCO)

Arcos Dorados Holdings Inc. (NYSE: ARCO) stock jumped 0.69% on Wednesday to $7.26 against a previous-day closing price of $7.21. With 0.61 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.83 million shares. During the session, the Restaurants company that operates in wider Consumer Cyclical sector, reached to the highest price of $7.27 whereas the lowest price it dropped to was $7.02. The 52-week range on ARCO shows that it touched its highest point at $8.44 and its lowest point at $4.83 during that stretch. It currently has a 1-year price target of $10.15. With its current market cap of 1.58 billion, ARCO has annualized dividend of $0.04 while the current yield stands at 0.55%. Beta for the stock currently stands at 1.08.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ARCO was up-trending over the past week, with a rise of 0.69%, but this was up by 3.57% over a month. Three-month performance dropped to -7.98% while six-month performance fell -2.55%. The stock gained 40.97% in the past year, while it has gained 24.53% so far this year. A look at the trailing 12-month EPS for ARCO yields 0.52 with Next year EPS estimates of 0.59. For the next quarter, that number is 0.17. This implies an EPS growth rate of 130.00% for this year and 19.68% for next year. EPS is expected to grow by 42.56% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -9.90%.

Float and Shares Shorts:

At present, 210.59 million ARCO shares are outstanding with a float of 124.79 million shares on hand for trading. On Oct 13, 2022, short shares totaled 0.71 million, which was 0.34% higher than short shares on Sep 14, 2022. In addition to Mr. Woods W. Staton as the firm’s Exec. Chairman, Mr. Marcelo Rabach serves as its CEO & Director.

Institutional Ownership:

Through their ownership of 41.66% of ARCO’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 34.88% of ARCO, in contrast to 31.65% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in ARCO with 7.65% of the stake, Invesco Advisers, Inc. holds 9,994,337 shares worth 9,994,337. A second-largest stockholder of ARCO, TIAA-CREF Investment Management L, holds 8,679,677 shares, controlling over 6.65% of the firm’s shares. Teachers Advisors LLC is the third largest shareholder in ARCO, holding 7,483,755 shares or 5.73% stake. With a 7.45% stake in ARCO, the Invesco Emerging Markets All Cap is the largest stakeholder. A total of 9,723,960 shares are owned by the mutual fund manager. The CREF Stock Account, which owns about 6.65% of ARCO stock, is the second-largest Mutual Fund holder. It holds 8,679,677 shares valued at 65.44 million. TIAA-CREF Emerging Markets Equity holds 5.38% of the stake in ARCO, owning 7,025,472 shares worth 52.97 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ARCO since 9 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ARCO analysts setting a high price target of $12.00 and a low target of $8.00, the average target price over the next 12 months is $10.17. Based on these targets, ARCO could surge 65.29% to reach the target high and rise by 10.19% to reach the target low. Reaching the average price target will result in a growth of 40.08% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ARCO will report FY 2022 earnings on 03/15/2023. Analysts have provided yearly estimates in a range of $0.64 being high and $0.45 being low. For ARCO, this leads to a yearly average estimate of $0.52. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Arcos Dorados Holdings Inc. surprised analysts by $0.12 when it reported $0.22 EPS against a consensus estimate of $0.10. The surprise factor in the prior quarter was -$0.05. Based on analyst estimates, the high estimate for the next quarter is $0.23 and the low estimate is $0.14. The average estimate for the next quarter is thus $0.19.

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