Arco Platform Limited (ARCE) Stock: Here’s Why It’s Falling In Value

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Arco Platform Limited (ARCE) is making a move down in the market today. The company, one that is focused in the tech sector, is presently priced at $26.30 after heading down -5.60% so far today. As it relates to technology companies, there are a number of aspects that have the ability to generate price movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent headlines associated with ARCE:

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Mar-13-19 09:29AM The Zacks Analyst Blog Highlights: eGain, The Meet Group, Alteryx, Arco Platform and Micro Focus International
Mar-12-19 08:34AM Bet on These 6 Internet Software Stocks to Gain in 2019
Feb-25-19 12:56PM How Do Arco Platform Limiteds (NASDAQ:ARCE) Returns Compare To Its Industry?
Feb-05-19 04:37PM Arco Platform Limited to Report Fourth Quarter and Fiscal Year 2018 Financial Results on March 19, 2019
Dec-25-18 09:49AM Should We Be Cautious About Arco Platform Limiteds (NASDAQ:ARCE) ROE Of 0.2%?

Nonetheless, when making a decision to invest, investors should focus on far more than news, this is especially the case in the ever changing tech sector. Here’s what’s happing when it comes to Arco Platform Limited.

Performance Trends That We’ve Seen From ARCE

Although a move down in a single session, like the move that we’re seeing from Arco Platform Limited might make some investors fearful, a single session fall by itself should not be the reason for a decision to, or not to, invest in a stock. It’s always important to take a look at trends further out than a single trading session. In the case of ARCE, below are the returns that we have seen:

  • Past 7 Days – In the last 7 days, ARCE has generated a price change that amounts to -1.98%.
  • Monthly – The return on investment from Arco Platform Limited throughout the past month comes to -0.23%.
  • Past 3 Months – Throughout the past 3 months, the stock has produced a ROI that works out to 25.24%
  • Past Six Months – Over the previous 6 months, we’ve seen a performance that works out to 0 from the stock.
  • This Year So Far – Since the the last trading session of last year ARCE has produced a ROI of 18.90%.
  • Full Year – Finally, throughout the past full year, we’ve seen movement amounting to 0 from ARCE. Over this period, the stock has traded at a high of -9.56% and a low of 48.76%.

Rations That You Should Consider

Digging into various key ratios having to do with a company can provide traders an understanding of just how dangerous and/or rewarding a stock pick might be. Here are some of the key ratios to think about when digging into ARCE.

Short Ratio – The short ratio is a measure of short interest. The higher this ratio, the more investors are expecting that the price of the stock is going to tumble. Across the sector, strong technology stocks tend to have a lower short ratio. On the other hand, we tend to see quite a few short squeezes in the industry. Nonetheless, in relation to Arco Platform Limited, the stock’s short ratio is 0.95.

Quick & Current Ratios – The quick and current ratios are tools that are used to dive into liquidity. Basically, they measure the company’s abilities to cover its debts when they mature with only current assets or quick assets. Because in tech, companies rely on the continuation of investor support as they work to bring new technologies to market, the current and quick ratios can look damning. Nonetheless, some better companies in the technology space come with good quick and current ratios. When it comes to ARCE, the quick and current ratios total up to 15.60 and 15.90 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the book value of assets that are owned by the company. In this particular case, the book to share value ratio is 6.15.

Cash To Share Value – Finally, the cash to share value comparison compares the total amount of cash the company has on hand to the price of the company’s stock. When it comes to ARCE, the cash to share value ratio is 4.88.

Investors Tend To Follow The Big Money

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in ARCE, here’s what we’re seeing:

  • Institutions – At the moment, institutions hold 99.60% of ARCE. Nonetheless, it is important to note that the ownership held by institutions has changed in the amount of 1.86% in the past quarter.
  • Insider Moves – with regard to insiders, insiders of the company currently own 0.44% of Arco Platform Limited. Their ownership of the company has seen a change of 0 in the past quarter.

Analyst Opinions Of Arco Platform Limited

While it’s never a smart idea to avoid doing your DD and blindly following the opinions of analysts, it is a good idea to consider their opinions in order to validate your own thoughts before making an investment decision in the tech industry. Below you’ll find the most recent moves that we’ve seen from analysts as it relates to ARCE.

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Nov-21-18 Initiated UBS Buy $28
Oct-22-18 Initiated Morgan Stanley Overweight $27
Oct-22-18 Initiated Goldman Buy $26

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $2.84. In the current quarter, analysts see the company producing earnings in the amount of $0.54. Over the last 5 years, ARCE has generated revenue in the amount of $0 with earnings coming in at 0. On a quarter over quarter basis, earnings have seen movement of 0 and revenue has seen movement of 69.00%.

What’s Going On With Share Counts?

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 48.19M shares of Arco Platform Limited outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, ARCE has a float of 12.78M.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to ARCE, the short percent of the float is 0.41%.

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