DCF Valuation
Arcos Dorados Holdings Inc (ARCO) DCF Valuation — Is ARCO undervalued?
The estimated DCF fair value of one Arcos Dorados Holdings Inc (ARCO) share is $27.96. Compared to the current market price of $8.47, the stock is undervalued by 230.1%.
DCF fair value
$27.96
Market price
$8.47
Upside / downside
+230.1%
Prefer the inverse question? See what growth rate the market is pricing into ARCO →
Arcos Dorados Holdings Inc (ARCO) DCF valuation FAQ
What is the DCF fair value of Arcos Dorados Holdings Inc (ARCO)?
The discounted-cash-flow model estimates the intrinsic fair value of one Arcos Dorados Holdings Inc (ARCO) share at $27.96, based on a 10-year projection of its cash flows converging to Damodaran industry averages.
Is Arcos Dorados Holdings Inc (ARCO) overvalued or undervalued?
Against the current market price of $8.47, the DCF fair value of $27.96 implies ARCO is undervalued by 230.1%.
How is the ARCO DCF value calculated?
It is a 10-year discounted-cash-flow estimate built from Arcos Dorados Holdings Inc's reported fundamentals, with terminal assumptions anchored to Damodaran NYU industry datasets. The market price refreshes daily; the DCF fair value updates when Arcos Dorados Holdings Inc files a new quarterly or annual report.
How this ARCO valuation is built
The model projects ten years of Arcos Dorados Holdings Inc's free cash flow to the firm and discounts each year at its own cost of capital. Rather than assuming today's growth and margins persist forever, a moat-scoring step — weighing Arcos Dorados Holdings Inc's ROIC-versus-WACC spread, gross-margin trend, and reinvestment efficiency — decides how many years the business holds its edge before its economics mean-revert toward the Damodaran NYU benchmarks for its industry.
WACC is rebuilt each year from an unlevered-then-relevered beta and the company's evolving capital structure; terminal value uses the Gordon growth model with a reinvestment rate tied to the return earned on new capital (goodwill stripped out to reflect operating efficiency). Every assumption — growth, margins, tax, leverage, convergence timing — is editable, and running the full interactive model adds a 10,000-draw Monte Carlo simulation and WACC-versus-terminal-growth sensitivity heatmaps.
The market price refreshes daily; the DCF fair value updates when Arcos Dorados Holdings Inc files a new quarterly or annual report. For educational/informational purposes only — not investment advice. Last updated 2026-08-06.