Arko: The USPP Deal Looks Worse Than It Really Is

Pedro Goulart 968 Followers Follow Summary Arko Corp. remains a 'Buy' despite operational weakness and market skepticism following the USPP acquisition and a disappointing quarter. ARKO's acquisition of USPP adds 280 million gallons in wholesale fuel volume but raises leverage to 3–3.5x EBITDA, reigniting concerns over asset intensity. Retail fuel volume declined 5.7%, pressuring EBITDA, but wholesale expansion is seen as a buffer against retail headwinds. My revised SOTP fair value is $7.40 per share, implying nearly 60% upside if normalization occurs, though conviction in guidance is required for a stronger rating. Orbon Alija/E+ via Getty Images It took me a moment to blink and Arko Corp. ( ARKO ) already gave me a ton of topics to discuss. If you look at my last article here, you saw that with a SOTP valuation This article was written by Pedro Goulart 968 Followers Follow I’m an equity analyst and founder of Goulart’s Restaurant Stocks, a research firm focused on the U.S. restaurant industry — from quick-service and fast casual to fine dining and niche concepts. I lead all thematic research and valuation efforts, applying advanced financial modeling, sector-specific KPIs, and strategic insights to uncover hidden value across public equities. In addition to restaurants, I cover consumer discretionary, food & beverage, casinos & gaming, and IPOs, with a particular focus on micro and small caps that are often overlooked by mainstream analysts. My research has been featured on Seeking Alpha, Yahoo Finance, Mises Institute, Investing.com and other plataforms. My background combines hands-on experience in finance and business management with academic foundations. I hold an MBA in Controllership and Accounting Forensics, a Bachelor’s in Business Administration. I’ve also pursued specialized training in valuation, financial modeling, and restaurant operations (I had a brief experience as an undergraduate as a franchise partner for a regional ice cream shop). Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.