Arcos Dorados Holdings Inc (ARCO)vsDarden Restaurants Inc (DRI)
ARCO
Arcos Dorados Holdings Inc
$8.28
-1.66%
CONSUMER CYCLICAL · Cap: $1.72B
DRI
Darden Restaurants Inc
$212.23
+2.54%
CONSUMER CYCLICAL · Cap: $22.74B
Smart Verdict
WallStSmart Research — data-driven comparison
Darden Restaurants Inc generates 174% more annual revenue ($13.21B vs $4.82B). DRI leads profitability with a 9.1% profit margin vs 4.9%. ARCO appears more attractively valued with a PEG of 0.54. ARCO earns a higher WallStSmart Score of 70/100 (B-).
ARCO
Strong Buy70
out of 100
Grade: B-
DRI
Strong Buy67
out of 100
Grade: B-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+25.8%
Fair Value
$11.33
Current Price
$8.28
$3.05 discount
Margin of Safety
-89.5%
Fair Value
$112.30
Current Price
$212.23
$99.93 premium
Key Strengths & Concerns
Side-by-side fundamental analysis
Key Strengths
Attractively priced relative to earnings
Every $100 of equity generates 30 in profit
Earnings expanding 159.4% YoY
Growing faster than its price suggests
Reasonable price relative to book value
Every $100 of equity generates 55 in profit
Earnings expanding 36.0% YoY
Areas to Watch
Grey zone — moderate risk
Smaller company, higher risk/reward
4.9% margin — thin
Negative free cash flow — burning cash
Expensive relative to growth rate
Trading at 11.0x book value
Negative free cash flow — burning cash
Distress zone — elevated risk
Comparative Analysis Report
WallStSmart ResearchBull Case : ARCO
The strongest argument for ARCO centers on P/E Ratio, Return on Equity, EPS Growth. Revenue growth of 12.9% demonstrates continued momentum. PEG of 0.54 suggests the stock is reasonably priced for its growth.
Bull Case : DRI
The strongest argument for DRI centers on Return on Equity, EPS Growth. Revenue growth of 13.7% demonstrates continued momentum.
Bear Case : ARCO
The primary concerns for ARCO are Altman Z-Score, Market Cap, Profit Margin. Debt-to-equity of 2.82 is elevated, increasing financial risk. Thin 4.9% margins leave little buffer for downturns.
Bear Case : DRI
The primary concerns for DRI are PEG Ratio, Price/Book, Free Cash Flow. Debt-to-equity of 2.74 is elevated, increasing financial risk.
Key Dynamics to Monitor
DRI carries more volatility with a beta of 0.58 — expect wider price swings.
DRI is growing revenue faster at 13.7% — sustainability is the question.
ARCO generates stronger free cash flow (-19M), providing more financial flexibility.
Monitor RESTAURANTS industry trends, competitive dynamics, and regulatory changes.
Bottom Line
ARCO scores higher overall (70/100 vs 67/100) and 12.9% revenue growth. Both earn "Strong Buy" and "Strong Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.
This analysis is generated from publicly available financial data. Not financial advice.
Arcos Dorados Holdings Inc
CONSUMER CYCLICAL · RESTAURANTS · USA
Arcos Dorados Holdings Inc. is a McDonald's restaurant franchise. The company is headquartered in Montevideo, Uruguay.
Visit Website →Darden Restaurants Inc
CONSUMER CYCLICAL · RESTAURANTS · USA
Darden Restaurants, Inc. is an American multi-brand restaurant operator headquartered in Orlando.
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