Arcos Dorados Holdings Inc (ARCO)vsThe Home Depot Inc (HD)
ARCO
Arcos Dorados Holdings Inc
$8.20
-0.73%
CONSUMER CYCLICAL · Cap: $1.83B
HD
The Home Depot Inc
$310.78
+0.73%
CONSUMER CYCLICAL · Cap: $310.62B
Smart Verdict
WallStSmart Research — data-driven comparison
The Home Depot Inc generates 3358% more annual revenue ($166.59B vs $4.82B). HD leads profitability with a 8.4% 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-
HD
Buy54
out of 100
Grade: C-
Intrinsic Value Comparison
Multi-model valuation · Graham Formula
Margin of Safety
+25.8%
Fair Value
$11.33
Current Price
$8.20
$3.13 discount
Margin of Safety
-46.5%
Fair Value
$212.07
Current Price
$310.78
$98.71 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
Mega-cap, among the largest globally
Every $100 of equity generates 101 in profit
Safe zone — low bankruptcy risk
Generating 5.2B in free cash flow
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
4.8% revenue growth
Weak financial health signals
Trading at 22.3x book value
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 : HD
The strongest argument for HD centers on Market Cap, Return on Equity, Altman Z-Score.
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 : HD
The primary concerns for HD are PEG Ratio, Revenue Growth, Piotroski F-Score. Debt-to-equity of 4.18 is elevated, increasing financial risk.
Key Dynamics to Monitor
HD carries more volatility with a beta of 1.00 — expect wider price swings.
ARCO is growing revenue faster at 12.9% — sustainability is the question.
HD generates stronger free cash flow (5.2B), providing more financial flexibility.
Monitor RESTAURANTS industry trends, competitive dynamics, and regulatory changes.
Bottom Line
ARCO scores higher overall (70/100 vs 54/100) and 12.9% revenue growth. Both earn "Strong Buy" and "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 →The Home Depot Inc
CONSUMER CYCLICAL · HOME IMPROVEMENT RETAIL · USA
The Home Depot, Inc., commonly known as Home Depot, is the largest home improvement retailer in the United States, supplying tools, construction products, and services. The company is headquartered in incorporated Cobb County, Georgia, with an Atlanta mailing address.
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