Darling Ingredients (DAR) AI Stock Analysis

• Market Cap: $4.99B
• Dividend Yield: N/A
• Average Volume (3M): 2.23M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 1.10
• Revenue Growth: -15.34%
• EPS Growth: -56.83%
• Country: US
• Employees: 15,500
• Sector: Consumer Defensive
• Sector Strength: 73
• Industry: Packaged Foods
• EPS (TTM): 1.73
• Shares Outstanding: 158,146,070
• 10 Day Avg. Volume: 1,971,191
• 30 Day Avg. Volume: 2,226,414
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.80
• Price to Cash Flow (P/CF): 4.30
• P/FCF Ratio: 4.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $53.88
• Price Target Upside: 70.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

Darling Ingredients' overall score is driven by its solid financial position and strategic initiatives, including debt reduction and product launches. Despite short-term challenges in profitability and revenue, the company's robust cash flow and strategic board appointment position it well for future growth. The technical analysis presents a mixed outlook, and while the valuation is reasonable, the lack of a dividend yield may deter some investors.

Positive Factors

Debt Management

DAR has lowered its net debt by $335mn, with a goal to pay down $350-$500mn in the coming year.

Growth Drivers

Growth drivers for DAR include SAF 2, further rationalization of biodiesel capacity, a more robust LCFS program, favorable RVO, and continued operational improvement.

Valuation

Fundamentals have begun to inflect positively, guidance is achievable with upside potential, and valuation remains attractive for the improving business trajectory.

Negative Factors

Earnings Estimates

We reduce our 4Q24 estimate from $319MM that is in line with consensus to $271MM.

Earnings Guidance

DAR reduced 2025 EBITDA guide from $1.5B to ~$1.3B, in-line with our forecast and what we consider a more realistic outlook.

Quarterly Performance

DAR's Q3 results missed estimates for most key metrics with management lowering 2024 guidance.

Darling Ingredients Business Overview & Revenue Model

Company Description

Darling Ingredients Inc. is a global leader in creating sustainable food, feed, and fuel ingredients. Operating in sectors such as food, agriculture, and renewable energy, the company specializes in converting edible by-products and food waste into valuable products including animal feed, green energy, and specialty ingredients for various industries. With its extensive network of processing plants and a commitment to sustainability, Darling Ingredients plays a crucial role in the circular economy by reducing waste and maximizing resource efficiency.

How the Company Makes Money

Darling Ingredients generates revenue primarily through the collection and processing of organic waste streams into valuable ingredients and products. Key revenue streams include the production of animal feed ingredients, such as proteins and fats, from by-products collected from the food industry. Additionally, the company produces renewable diesel and other green energy products through its joint venture with Valero Energy Corporation, Diamond Green Diesel, which converts waste fats and oils into renewable fuels. Strategic partnerships, such as those with food processors and agricultural companies, and the growing demand for sustainable products contribute significantly to its earnings. The company's diverse product offerings and global operations allow it to tap into multiple markets, further enhancing its revenue potential.

Darling Ingredients Financial Statement Overview

Summary

Darling Ingredients presents a solid financial standing with strong equity and cash flow positions. While recent revenue and profit margins face challenges, the company's zero debt and robust cash management buffer against market volatility. Continued focus on profitability and revenue growth could further enhance financial performance.

Income Statement

Darling Ingredients shows a strong revenue base with a slight decline in the most recent year, likely due to market fluctuations. Gross Profit Margin remains high at 100%, suggesting efficient cost management. However, the decreasing Net Income and EBIT margins indicate pressures on profitability. The Revenue Growth Rate has fluctuated, with a notable decrease recently, which could signal market challenges.

Balance Sheet

The company exhibits a robust financial position with zero debt in the latest period, drastically improving its Debt-to-Equity Ratio. The Return on Equity remains healthy, reflecting strong shareholder returns. The Equity Ratio is solid, indicating financial stability and a strong asset base. This positions the company well against potential economic changes.

Cash Flow

Darling Ingredients maintains a strong cash flow with consistent operating cash flow exceeding net income, indicating good cash conversion. The Free Cash Flow has shown growth, albeit with some fluctuations, suggesting efficient capital expenditure management. The Free Cash Flow to Net Income Ratio is strong, supporting the company's reinvestment and dividend capabilities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
5.07B	6.79B	6.53B	4.74B	3.57B
	Gross Profit
628.25M	1.65B	1.53B	1.24B	883.11M
	EBIT
314.90M	949.73M	1.03B	884.47M	430.94M
	EBITDA
524.66M	1.10B	1.09B	850.45M	503.64M
	Net Income Common Stockholders
278.88M	647.73M	737.69M	650.91M	296.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
353.45M	126.50M	127.02M	68.91M	81.62M
	Total Assets
10.07B	11.06B	9.20B	6.13B	5.61B
	Total Debt
4.26B	4.64B	3.58B	1.62B	1.66B
	Net Debt
4.18B	4.51B	3.45B	1.55B	1.58B
	Total Liabilities
5.61B	6.37B	5.31B	2.79B	2.66B
	Stockholders Equity
4.39B	4.61B	3.81B	3.28B	2.89B
Cash Flow		Free Cash Flow
506.82M	342.26M	420.94M	430.02M	340.73M
	Operating Cash Flow
839.29M	899.26M	813.74M	704.42M	624.65M
	Investing Cash Flow
-498.90M	-1.68B	-2.42B	-490.26M	-310.63M
	Financing Cash Flow
-399.56M	876.29M	1.68B	-221.36M	-306.99M

Darling Ingredients Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAR, the sentiment is Negative. The current price of 31.55 is above the 20-day moving average (MA) of 30.90, below the 50-day MA of 34.98, and below the 200-day MA of 36.84, indicating a neutral trend. The MACD of -1.33 indicates Negative momentum. The RSI at 45.84 is Neutral, neither overbought nor oversold. The STOCH value of 81.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DAR.

Darling Ingredients Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSN	75 Outperform	$21.78B	20.63	5.74%	3.17%	1.27%	―
DAR	74 Outperform	$4.99B	18.27	6.21%	―	-15.34%	-56.83%
INGR	74 Outperform	$8.66B	13.90	17.62%	2.34%	-8.95%	1.35%
BG	69 Neutral	$10.24B	9.56	10.95%	3.56%	-10.78%	-45.77%
Sector *	63 Neutral	$20.68B	14.36	-12.41%	3.14%	1.24%	2.53%
ADM	60 Neutral	$22.99B	13.11	7.78%	4.20%	-9.01%	-43.53%
CARG	57 Neutral	$3.01B	159.40	3.62%	―	-2.17%	-26.53%

Darling Ingredients Corporate Events

Darling Ingredients Elects Soren Schroder to Board

On February 20, 2025, Darling Ingredients Inc. announced the election of Soren Schroder to its Board of Directors as an independent director, effective immediately. Schroder, who brings extensive experience in operations and corporate governance from his tenure as CEO of Bunge Global SA, will serve on the board’s compensation and audit committees. His appointment is expected to enhance Darling Ingredients’ strategic capabilities and help navigate market complexities for long-term growth.