Darling Ingredients (DAR) AI Stock Analysis

• Market Cap: $4.99B
• Dividend Yield: N/A
• Average Volume (3M): 2.28M
• Price to Earnings (P/E): 29.7
• Beta (1Y): 0.90
• Revenue Growth: -11.02%
• EPS Growth: -68.34%
• Country: US
• Employees: 15,500
• Sector: Consumer Defensive
• Sector Strength: 73
• Industry: Packaged Foods
• EPS (TTM): -0.16
• Shares Outstanding: 158,158,840
• 10 Day Avg. Volume: 2,533,191
• 30 Day Avg. Volume: 2,284,018
• PEG Ratio: -0.68
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.62
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 7.25
• Enterprise Value/Ebitda: 1.46
• 1Y Price Target: $47.63
• Price Target Upside: 51.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 71 Outperform
• Price Target: $35.00 ▲( 10.97% Upside)

Darling Ingredients benefits from a strong financial foundation and strategic corporate developments, such as the joint venture with Tessenderlo. However, valuation concerns and challenges in the DGD segment temper the overall outlook.

Positive Factors

Debt Reduction

DAR paid down approximately $150 million of debt during the first quarter of 2025, reducing its leverage ratio to 3.33x.

Growth Prospects

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

Regulatory Developments

First indications are 2026 RVO will include material step-up in biomass-based diesel, a material catalyst for DAR fundamentals.

Negative Factors

Earnings Pressure

Lower DGD earnings are expected from the second quarter to the fourth quarter as premium waste oil prices erode margins.

Market Skepticism

The market is unlikely to give Darling Ingredients the benefit of doubt on guidance due to limited transparency on the first quarter miss and an inconsistent track record on guidance.

Regulatory Uncertainty

Investors are expected to remain on the sidelines until there is clarity on regulations, particularly the 2026 RVO and LCFS amendment.

Darling Ingredients Business Overview & Revenue Model

Company Description

Darling Ingredients Inc. develops, produces, and sells natural ingredients from edible and inedible bio-nutrients. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries. The company also collects and transforms various animal by-product streams into useable and specialty ingredients, such as collagen, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstock, green energy, natural casings, and hides. In addition, it recovers and converts used cooking oil and animal fats, and residual bakery products into valuable feed and fuel ingredients. Further, the company provides environmental services, including grease trap collection and disposal services to food service establishments. It primarily operates under the Sonac, Dar Pro, Rothsay, Rousselot, Nature Safe, CleanStar, Peptan, Cookie Meal, Bakery Feeds, Ecoson, and Rendac brand names in North America, Europe, China, South America, Australia, and internationally. The company was formerly known as Darling International Inc. and changed its name to Darling Ingredients Inc. in May 2014. Darling Ingredients Inc. was founded in 1882 and is headquartered in Irving, Texas.

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 maintains a strong financial position with zero debt and robust cash flow. The balance sheet shows financial stability with healthy equity ratios. However, recent challenges in revenue growth and profitability suggest market pressures that need attention.

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
5.72B	6.79B	6.53B	4.74B	3.57B
	Gross Profit
1.28B	1.65B	1.53B	1.24B	883.11M
	EBIT
314.90M	949.73M	1.03B	884.47M	430.94M
	EBITDA
1.01B	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
75.97M	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
4.38B	4.61B	3.81B	3.28B	2.89B
Cash Flow		Free Cash Flow
506.81M	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: 31.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 31.54 is below the 20-day moving average (MA) of 33.50, below the 50-day MA of 31.54, and below the 200-day MA of 35.85, indicating a bearish trend. The MACD of 0.29 indicates Positive momentum. The RSI at 42.21 is Neutral, neither overbought nor oversold. The STOCH value of 7.84 is Positive, 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
BRFS	77 Outperform	$6.25B	8.90	23.47%	2.35%	3.82%	―
INGR	75 Outperform	$8.83B	14.49	16.31%	2.32%	-6.88%	-4.93%
DAR	71 Outperform	$4.99B	29.73	3.79%	―	-11.02%	-68.34%
POST	67 Neutral	$6.01B	19.47	9.15%	―	1.48%	9.36%
LW	67 Neutral	$7.20B	20.01	21.63%	2.84%	-2.49%	-65.96%
NOMD	66 Neutral	$2.70B	11.61	8.59%	3.51%	-0.24%	26.74%
Sector *	64 Neutral	$8.82B	14.56	4.78%	173.92%	3.50%	2.20%

Darling Ingredients Corporate Events

Darling Ingredients Forms Joint Venture with Tessenderlo

On May 12, 2025, Darling Ingredients Inc. announced a non-binding term sheet with Tessenderlo Group to form a joint venture, Nextida, combining their collagen and gelatin businesses. Darling will hold an 85% stake, and Tessenderlo 15%. This strategic partnership aims to create a leading company in the collagen-based health, wellness, and nutrition sectors, with expected annual revenue of $1.5 billion. The venture is anticipated to close in 2026, subject to customary conditions and regulatory approvals, and is expected to enhance product development and shareholder value while expanding market reach.

Darling Ingredients Holds Annual Stockholder Meeting

At the annual meeting held on May 7, 2025, Darling Ingredients Inc. stockholders elected the Board of Directors and voted on two proposals. The proposals included ratifying KPMG LLP as the independent registered public accountant for the fiscal year ending January 3, 2026, and approving the company’s executive compensation. These decisions reflect the company’s ongoing commitment to maintaining strong governance and financial oversight, which could impact its operational efficiency and stakeholder confidence.