Latest Ratios: P/E Ratio 8.2x · EV/EBITDA 6.6x · ROE 33.1%. (2008–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $1.7B | $1.5B | $1.5B | $2.7B | $1.8B | $1.2B | $1.0B | $1.7B | $1.7B | $2.2B | $1.2B |
| Enterprise Value | $3.6B | $3.4B | $3.1B | $4.2B | $3.1B | $2.5B | $2.5B | $3.1B | $2.1B | $2.5B | $1.5B |
| P/E Ratio → | 8.16 | 7.27 | 10.25 | 14.76 | 12.48 | 26.50 | — | 21.03 | 45.82 | 17.29 | 14.78 |
| P/S Ratio | 0.37 | 0.33 | 0.34 | 0.62 | 0.49 | 0.46 | 0.52 | 0.57 | 0.55 | 0.67 | 0.39 |
| P/B Ratio | 2.25 | 2.00 | 3.01 | 5.17 | 5.43 | 5.55 | 5.22 | 3.99 | 4.28 | 4.48 | 3.28 |
| P/FCF | 115.77 | 103.11 | — | 122.23 | 13.72 | 8.58 | — | — | — | 27.64 | 16.05 |
| P/OCF | 5.86 | 5.22 | 5.75 | 7.00 | 5.10 | 4.76 | 64.73 | 7.52 | 9.36 | 8.71 | 7.03 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 0.73 | 0.70 | 0.96 | 0.84 | 0.93 | 1.25 | 1.06 | 0.69 | 0.77 | 0.53 |
| EV / EBITDA | 6.59 | 6.24 | 6.21 | 8.99 | 7.95 | 9.54 | 41.14 | 11.06 | 9.23 | 6.84 | 5.67 |
| EV / EBIT | 10.30 | 9.13 | 9.58 | 13.22 | 11.55 | 19.47 | — | 18.30 | 15.33 | 10.14 | 7.49 |
| EV / FCF | — | 227.96 | — | 190.56 | 23.81 | 17.33 | — | — | — | 31.68 | 21.40 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 12.3% | 12.3% | 13.1% | 13.8% | 13.6% | 12.2% | 5.8% | 12.4% | 13.4% | 13.5% | 12.2% |
| Operating Margin | 7.5% | 7.5% | 7.3% | 7.2% | 7.3% | 5.2% | -3.4% | 5.4% | 4.0% | 8.2% | 6.1% |
| Net Profit Margin | 4.5% | 4.5% | 3.3% | 4.2% | 3.9% | 1.7% | -7.5% | 2.7% | 1.2% | 3.9% | 2.7% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 33.1% | 33.1% | 29.0% | 43.1% | 51.4% | 21.7% | -48.2% | 19.6% | 8.3% | 30.5% | 24.7% |
| ROA | 6.3% | 6.3% | 5.0% | 6.4% | 5.6% | 2.0% | -6.2% | 3.9% | 2.2% | 7.8% | 5.4% |
| ROIC | 11.1% | 11.1% | 11.9% | 13.0% | 12.8% | 6.7% | -2.9% | 8.9% | 11.2% | 26.3% | 17.1% |
| ROCE | 13.5% | 13.5% | 15.1% | 15.5% | 14.6% | 7.9% | -3.6% | 10.5% | 10.8% | 25.3% | 20.0% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 2.91 | 2.91 | 3.38 | 3.27 | 4.81 | 6.92 | 8.11 | 3.73 | 1.61 | 1.28 | 1.65 |
| Debt / EBITDA | 4.10 | 4.10 | 3.43 | 3.65 | 4.06 | 5.89 | 26.71 | 5.55 | 2.75 | 1.70 | 2.13 |
| Net Debt / Equity | — | 2.42 | 3.11 | 2.89 | 3.99 | 5.66 | 7.27 | 3.44 | 1.10 | 0.66 | 1.09 |
| Net Debt / EBITDA | 3.42 | 3.42 | 3.16 | 3.23 | 3.37 | 4.81 | 23.95 | 5.12 | 1.89 | 0.87 | 1.42 |
| Debt / FCF | — | 124.85 | — | 68.33 | 10.09 | 8.75 | — | — | — | 4.04 | 5.35 |
| Interest Coverage | 8.64 | 8.64 | 6.89 | 9.77 | 6.04 | 2.57 | -2.95 | 3.28 | 2.61 | 3.67 | 3.07 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.03 | 1.03 | 0.61 | 0.72 | 0.90 | 0.87 | 0.83 | 0.68 | 0.94 | 1.08 | 0.81 |
| Quick Ratio | 0.95 | 0.95 | 0.54 | 0.66 | 0.84 | 0.81 | 0.76 | 0.62 | 0.85 | 0.94 | 0.72 |
| Cash Ratio | 0.51 | 0.51 | 0.18 | 0.29 | 0.40 | 0.45 | 0.33 | 0.20 | 0.40 | 0.54 | 0.36 |
| Asset Turnover | — | 1.20 | 1.55 | 1.43 | 1.37 | 1.13 | 0.86 | 1.16 | 1.95 | 1.84 | 1.95 |
| Inventory Turnover | 61.82 | 61.82 | 75.19 | 70.69 | 62.42 | 61.80 | 55.62 | 68.53 | 57.88 | 34.70 | 52.55 |
| Days Sales Outstanding | — | 19.42 | 13.22 | 15.73 | 15.24 | 14.30 | 21.01 | 15.79 | 12.99 | 16.23 | 13.97 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.9% | 3.3% | 3.3% | 1.5% | 1.8% | 0.0% | 1.0% | 1.3% | 1.2% | — | — |
| Payout Ratio | 23.8% | 23.8% | 34.0% | 22.1% | 22.5% | 0.0% | — | 28.1% | 56.8% | — | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 12.3% | 13.8% | 9.8% | 6.8% | 8.0% | 3.8% | — | 4.8% | 2.2% | 5.8% | 6.8% |
| FCF Yield | 0.9% | 1.0% | — | 0.8% | 7.3% | 11.7% | — | — | — | 3.6% | 6.2% |
| Buyback Yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.7% | 0.0% | 0.0% | 0.8% | 2.7% | 0.0% | 0.0% |
| Total Shareholder Yield | 2.9% | 3.3% | 3.3% | 1.5% | 2.5% | 0.0% | 1.0% | 2.2% | 4.0% | 0.0% | 0.0% |
| Shares Outstanding | — | $211M | $211M | $211M | $211M | $211M | $208M | $210M | $216M | $218M | $217M |
MFA Renewal and FX Volatility
Based on reported figures, ARCO trades at a TTM P/E of 8.25, which appears to incorporate a significant 'LatAm discount' relative to global QSR peers like QSR, suggesting that investors are pricing in substantial sovereign and currency volatility rather than pure operational performance.
The current valuation multiples imply that the market remains skeptical of the company's ability to sustain earnings growth in hyperinflationary environments. While the forward EV/EBITDA of 4.53 suggests potential upside, this valuation is heavily contingent on the successful navigation of the upcoming 2027 MFA renewal.
As reported in financial statements, ROIC has remained in a narrow range between 1.5% and 4.3% over the last ten quarters, indicating that the company struggles to generate returns on invested capital that consistently exceed its cost of capital in a volatile regional environment.
The persistent capital expenditure requirements for store modernizations under the Master Franchise Agreement appear to act as a drag on overall capital efficiency. Investors should monitor whether the digital transition can eventually drive higher throughput and improve these returns, or if the asset-heavy model will continue to suppress ROIC.
According to recent quarterly data, the company maintains a negative cash conversion cycle, often reaching -13 days, which suggests that Arcos Dorados effectively utilizes its scale to manage supplier payment terms and optimize working capital despite the inherent volatility of its Latin American operations.
The ability to maintain a negative CCC is a critical operational strength, providing a buffer against the liquidity pressures typically associated with high-frequency restaurant models. However, this efficiency is highly dependent on the company's bargaining power with suppliers, which could be tested if regional economic conditions deteriorate further.
Based on the provided balance sheet data, the current ratio has consistently remained below 1.0, with a 2026Q1 reading of 0.80, indicating that the company operates with minimal liquidity buffers that could leave it exposed to sudden macroeconomic or operational shocks.
This lean liquidity profile is characteristic of the company's aggressive reinvestment strategy, but it warrants further investigation into the availability of credit facilities. The reliance on short-term operational cash flow to meet immediate obligations suggests that any disruption in regional consumer demand could quickly strain the balance sheet.
The P/E ratio is frequently misapplied to Arcos Dorados, as it fails to account for the significant underlying value of the company's prime 'Main and Main' real estate portfolio, which provides a structural valuation floor that is not captured by earnings-based multiples alone.
Investors should instead focus on EV/EBITDA or asset-based valuation metrics to better understand the company's true worth. Relying solely on P/E ignores the capital-intensive nature of the franchise model and the potential for real estate appreciation to offset operational volatility.
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Quick answers to the most common questions about buying ARCO stock.
Arcos Dorados Holdings Inc.'s current P/E ratio is 8.2x. The historical average is 23.2x. This places it at the 8th percentile of its historical range.
Arcos Dorados Holdings Inc.'s current EV/EBITDA is 6.6x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 10.8x.
Arcos Dorados Holdings Inc.'s return on equity (ROE) is 33.1%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 15.8%.
Based on historical data, Arcos Dorados Holdings Inc. is trading at a P/E of 8.2x. This is at the 8th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Arcos Dorados Holdings Inc.'s current dividend yield is 2.91% with a payout ratio of 23.8%.
Arcos Dorados Holdings Inc. has 12.3% gross margin and 7.5% operating margin.
Arcos Dorados Holdings Inc.'s Debt/EBITDA ratio is 4.1x, indicating high leverage. A ratio above 4x may signal elevated financial risk.