Published on 6 Apr 2024 on Simply Wall St. via Yahoo Finance
Is There An Opportunity With Arcos Dorados Holdings Inc.'s (NYSE:ARCO) 20% Undervaluation?
Key Insights
The projected fair value for Arcos Dorados Holdings is US$13.29 based on 2 Stage Free Cash Flow to EquityCurrent share price of US$10.63 suggests Arcos Dorados Holdings is potentially 20% undervalued The US$14.01 analyst price target for ARCO is 5.4% more than our estimate of fair value
How far off is Arcos Dorados Holdings Inc. (NYSE:ARCO) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the forecast future cash flows of the company and discounting them back to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.