DiamondRock Hospitality Company
$10.56
+2.6%DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 31 premium quality hotels with over 10,000 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families as well as unique boutique hotels in the lifestyle segment.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 18.2).
Valuation inputs: P/E 18.2, earnings yield +5.5%, momentum +2.6%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE +7.0%, ROIC +6.8%).
Profitability stack: net margin +9.0%, ROE +7.0%, ROIC +6.8%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile looks controlled across current risk inputs.
Risk factors: liabilities/assets +51.5%, momentum +2.6%, net margin +9.0%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
DiamondRock Hospitality Company Market vs Earnings Trajectory
Performance Analysis
EPS Growth
Strong earnings growth indicates robust business expansion and improving profitability.
Price-EPS Relationship
Stock price is moving in line with earnings growth—a healthy sign of fundamental-driven valuation.
Stock Price Change
Over the 1Y period, stock price has increased by 41.4%.
P/E Ratio (TTM)
Moderate P/E ratio suggests fair market valuation relative to earnings.
Key Insight
Strong earnings growth (+62.8%) is outpacing price appreciation (+41.4%), potentially indicating an attractive entry point as the market may not have fully recognized the improving fundamentals.
DiamondRock Hospitality Company Fair Value Envelope
DiamondRock Hospitality Company Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Acceptable margins but limited operational leverage. Operating expense control is important.
Net Profit Margin
Moderate profitability with room for improvement. Monitor interest expenses and tax efficiency.
Effective Tax Rate
Below-average tax rate suggests effective tax planning, favorable jurisdictions, or tax credits.
Profitability Insight
High margin compression: Large gap between gross and net margins suggests operational inefficiencies or heavy debt burden. Focus on expense management and deleveraging.
DiamondRock Hospitality Company Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Moderate capital requirements typical of many stable businesses. Healthy balance between reinvestment and cash generation.
FCF Growth Trend
Steady FCF growth indicates consistent cash generation improvement. On a positive trajectory.
Working Capital Impact
Working capital inflow boosted cash flow. Efficient management of receivables, inventory, and payables contributing positively.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
DiamondRock Hospitality Company Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Warning: Liquidity concerns. Current assets may not be sufficient to cover short-term obligations.
Debt-to-Equity Ratio
Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.
Working Capital
Negative working capital indicates short-term liabilities exceed short-term assets—potential liquidity stress.
Asset Composition
Capital-intensive business with significant long-term investments in property, equipment, or intangibles.
Financial Health Insight
Negative working capital with limited cash reserves requires immediate attention—potential liquidity crisis if not addressed promptly.
DiamondRock Hospitality Company Street Expectations Map
Wall Street analysts project that DRH stock may see slight declines over the coming 12 months. The consensus 1-year price target stands at 10.39, with estimates ranging from a low of 9.50 to a high of 12.00.
The consensus 1-year price target stands at 10.39, with estimates ranging from a low of 9.50 to a high of 12.00.
Analyst Consensus Analysis
Upside Potential
Fair value territory. Stock trading near consensus target suggests limited near-term catalysts. Focus on fundamental developments.
Analyst Agreement
Good consensus alignment. Moderate target spread reflects general agreement on value drivers with some variance in assumptions.
Risk-Reward Profile
Balanced risk-reward. Upside and downside potential relatively symmetric. Suitable for moderate risk tolerance with conviction in thesis.
Analyst Conviction
Neutral sentiment. Fair value pricing with moderate agreement suggests wait-and-see approach or catalyst-driven opportunity.
Market Sentiment Insight
Efficient pricing: Stock trading at fair value with strong consensus suggests market has priced in expectations. Look for fundamental inflection points or new catalysts to drive meaningful moves.
DiamondRock Hospitality Company Insider Positioning
During the last 12 months, insiders have sold $56K worth of DRH shares, with no buying activity reported.
3 Months
0
0.00
0
0.00
+0
+$0
3-6 Months
0
0.00
4.0K
39.72K
-40K
-$40K
6-9 Months
0
0.00
0
0.00
+0
+$0
9-12 Months
0
0.00
2.1K
15.95K
-16K
-$16K
Top Buyers
No buying activity
Top Sellers
Spierto Steve
Officer: Svp, Chief Accounting Officer
$40K
Fischer Anika
Officer: Svp & General Counsel
$16K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $56K net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Insider Participation
2 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
drh Dividend History
Learning Layer
Related Guides
Build conviction on DRH by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.