DiamondRock Hospitality Company Fundamental Analysis (NASDAQ: DRH)
DiamondRock Hospitality Company Fundamental Analysis (NASDAQ: DRH)
DiamondRock Hospitality Company (NASDAQ: DRH) shows moderate financial fundamentals with a PE ratio of 17.41, profit margin of 13.52%, and ROE of 10.27%. The company generates $1.1B in annual revenue with weak year-over-year growth of -0.83%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 42.9/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DRH's fundamental strength across five key dimensions:
Efficiency Score
WeakDRH struggles to generate sufficient returns from assets.
Valuation Score
ExcellentDRH trades at attractive valuation levels.
Growth Score
WeakDRH faces weak or negative growth trends.
Financial Health Score
ExcellentDRH maintains a strong and stable balance sheet.
Profitability Score
WeakDRH struggles to sustain strong margins.
Key Financial Metrics
Is DRH Expensive or Cheap?
P/E Ratio
DRH trades at 17.41 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DRH's PEG of 0.11 indicates potential undervaluation.
Price to Book
The market values DiamondRock Hospitality Company at 1.71 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.58 times EBITDA. This is generally considered low.
How Well Does DRH Make Money?
Net Profit Margin
For every $100 in sales, DiamondRock Hospitality Company keeps $13.52 as profit after all expenses.
Operating Margin
Core operations generate 16.09 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.27 in profit for every $100 of shareholder equity.
ROA
DiamondRock Hospitality Company generates $5.01 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
DiamondRock Hospitality Company produces operating cash flow of $243.79M, showing steady but balanced cash generation.
Free Cash Flow
DiamondRock Hospitality Company generates strong free cash flow of $163.31M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.80 in free cash annually.
FCF Yield
DRH converts 6.26% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.41
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.71
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.29
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.79
vs 25 benchmark
Current Ratio
Current assets to current liabilities
15.32
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How DRH Stacks Against Its Sector Peers
| Metric | DRH Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.41 | 26.30 | Better (Cheaper) |
| ROE | 10.27% | 808.00% | Weak |
| Net Margin | 13.52% | 2704.00% | Weak |
| Debt/Equity | 0.79 | -37.38 (disorted) | Distorted |
| Current Ratio | 15.32 | 39.56 | Strong Liquidity |
| ROA | 5.01% | 277.00% | Weak |
DRH outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews DiamondRock Hospitality Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
265.87%
Industry Style: Income, Inflation Hedge, REIT
High GrowthEPS CAGR
125.15%
Industry Style: Income, Inflation Hedge, REIT
High GrowthFCF CAGR
384.72%
Industry Style: Income, Inflation Hedge, REIT
High Growth