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Diamondrock Hospitality (DRH)
:DRH
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Diamondrock
(NYSE:DRH)
Rating:61Neutral
Price Target:
$8.50
▲(5.46% Upside)
Positive Factors
Dividends
DRH declared a $0.03/sh Q4 dividend, unchanged since '22, but also a $0.20 stub, totaling $0.32/sh in 2024.
Stock Performance
Shares of DRH have outperformed its lodging peers YTD (-1.7% vs. the group of -8.7%).
Negative Factors
Market Trends
2025 Group Pace Currently Trending Down.
Operational Performance
We do not expect operational outperformance by the company in 2025.
Diamondrock (DRH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.62B
Dividend Yield5.34%
Average Volume (3M)2.74M
Price to Earnings (P/E)28.3
Beta (1Y)1.04
Revenue Growth1.72%
EPS Growth-3.49%
CountryUS
Employees31
SectorReal Estate
Sector Strength54
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.18
Shares Outstanding204,954,590
10 Day Avg. Volume3,142,233
30 Day Avg. Volume2,744,063
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue2.32
Enterprise Value/Gross Profit3.11
Enterprise Value/Ebitda10.57
Forecast
1Y Price Target
$8.89Price Target Upside10.30% Upside
Rating ConsensusHold
Number of Analyst Covering8
Diamondrock Business Overview & Revenue Model
Company DescriptionDiamondRock 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.
How the Company Makes MoneyDiamondRock generates revenue primarily through the operation of its hotel properties, which includes both room rentals and ancillary services such as food and beverage, event hosting, and other guest services. The company earns income from its hotels by leasing them to third-party hotel operators, who manage daily operations and guest services, typically under well-known hotel brands. Additionally, DiamondRock may receive management fees from these operators based on the hotels' performance. The company's revenue model is further supported by strategic partnerships with established hotel brands and operators, which enhance its market presence and operational efficiency. Revenue is also influenced by factors such as hotel occupancy rates, average daily rates (ADR), and seasonal travel trends, contributing to its overall financial performance.
Diamondrock Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: 4.81%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment with positive financial achievements and strategic initiatives, such as share repurchases and successful refinancing, alongside challenges in resort portfolio performance, occupancy, and RevPAR growth. The company is optimistic about future opportunities but acknowledged current operational hurdles.Q2-2025 Updates
Positive Updates
Urban Hotels Performance
The urban portfolio achieved a 3% RevPAR growth in the quarter, with April being the strongest month. Rate growth held steady at approximately 2.5% over the quarter. Total RevPAR growth at urban hotels was 100 basis points stronger than RevPAR growth, and food and beverage revenues were up over 5%.
Financial Achievements
Corporate adjusted EBITDA was $90.5 million, and adjusted FFO per share was $0.35. Free cash flow per share for the trailing 12 months increased approximately 4.5% to $0.63 per share.
Share Repurchases
The company repurchased 3.6 million shares year-to-date for $27.3 million at a cap rate of just under 10%. There is $146.8 million of capacity remaining on the share repurchase authorization.
Successful Refinancing
DiamondRock successfully refinanced, upsized, and extended the maturities under their senior unsecured credit facility, increasing its size to $1.5 billion from $1.2 billion with the pricing grid unchanged.
Food and Beverage Performance
F&B revenues increased 3.1%, with F&B profit increasing over 6% and margins increasing 105 basis points.
Negative Updates
Resort Portfolio Decline
Comparable RevPAR declined 6.3% and total RevPAR declined 3.9% in the resort portfolio. The opening of the redeveloped Orchards in Sedona was delayed, impacting performance.
Occupancy and Revenue Challenges
Comparable RevPAR growth in the second quarter was only 0.1%, with a 1.1% increase in rate but an 80 basis point decline in occupancy. Leisure transient revenue declined by 1.6%.
Property Tax Impact
A larger-than-expected property tax increase in Chicago led to a contraction in hotel EBITDA margins by 97 basis points.
RevPAR Challenges
Looking into the third quarter, the company expects the total portfolio RevPAR to decline in the low single digits.
Delayed ROI Projects
The integration of the Orchards Inn into L'Auberge de Sedona was delayed due to waiting for a certificate of occupancy, impacting the resort portfolio performance.
Company Guidance
During the DiamondRock Hospitality Company's Second Quarter 2025 Earnings Call, several key metrics and guidance details were discussed. Comparable RevPAR growth for the quarter was 0.1%, influenced by a 1.1% increase in rate and an 80 basis point decline in occupancy, with ongoing renovations impacting results by approximately 50 basis points. Total RevPAR grew by 1.1%, supported by a 4.2% rise in out-of-room revenues per occupied room, reaching a quarterly high of $160. Group room revenue increased by 0.8%, while business transient revenue rose by 4.2% and leisure transient revenue decreased by 1.6%. Food and beverage revenues climbed by 3.1%, with profits increasing over 6% and margins expanding by 105 basis points. Operating expenses rose by 0.7%, excluding a significant property tax increase in Chicago. Corporate adjusted EBITDA stood at $90.5 million, with adjusted FFO per share at $0.35. The company expects a low single-digit decline in total portfolio RevPAR for the third quarter of 2025, with corporate adjusted EBITDA forecasted to range between $275 million to $295 million for the full year. Additionally, the share repurchase program saw 3.6 million shares repurchased year-to-date, with $146.8 million of capacity remaining for further buybacks.Diamondrock Financial Statement Overview
Summary
Diamondrock's financial statements reveal a recovering entity with improvements in revenue, operational efficiency, and cash flow, though profitability remains a challenge. The balance sheet shows strengthened equity and reduced leverage, enhancing financial stability. Continued focus on boosting net income and maintaining cash flow growth will be critical for future success.Income Statement
The income statement shows a moderate financial performance with a gross profit margin of 100%, indicating significant improvement in cost management. However, the net profit margin of 3.38% for 2024 reflects challenges in profitability. Revenue growth from 2023 to 2024 was 5.12%, which is a positive trend compared to previous years. The EBIT margin stood at 9.82%, while the EBITDA margin was 19.10%, both showing reasonable operational efficiency. Improvements are visible, but net income remains relatively low.62
Positive
Balance Sheet
The balance sheet indicates a strong equity position with a debt-to-equity ratio of 0, due to the absence of total debt in 2024, which is a significant improvement. Return on Equity (ROE) is 2.40%, showing modest returns on shareholder investments. The equity ratio is 50.14%, suggesting a stable financial structure with half of the assets financed by equity. The overall financial stability seems robust with reduced leverage risk.75
Positive
Cash Flow
Cash flow analysis shows positive developments. Free cash flow grew by 20.48% from 2023 to 2024, highlighting improved cash generation. The operating cash flow to net income ratio is 5.87, indicating strong cash flow from operations relative to net income. The free cash flow to net income ratio is 3.73, suggesting efficient cash generation despite low net income. Cash flow stability is enhanced but requires continued attention to sustain growth.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.12B | 1.13B | 1.07B | 1.00B | 567.13M | 299.49M |
| Gross Profit | 837.51M | 617.94M | 293.11M | 360.87M | 105.43M | -41.14M |
| EBITDA | 246.43M | 258.69M | 263.33M | 286.33M | 80.58M | -84.60M |
| Net Income | 65.43M | 48.05M | 86.34M | 109.33M | -195.41M | -396.03M |
Balance Sheet | ||||||
| Total Assets | 3.06B | 3.17B | 3.24B | 3.21B | 2.97B | 3.15B |
| Cash, Cash Equivalents and Short-Term Investments | 52.40M | 81.38M | 121.59M | 67.56M | 38.62M | 111.80M |
| Total Debt | 1.11B | 1.18B | 1.29B | 1.30B | 1.18B | 1.15B |
| Total Liabilities | 1.48B | 1.57B | 1.59B | 1.61B | 1.44B | 1.43B |
| Stockholders Equity | 1.58B | 1.59B | 1.64B | 1.59B | 1.52B | 1.71B |
Cash Flow | ||||||
| Free Cash Flow | 121.02M | 142.82M | 118.55M | -43.36M | -49.44M | -173.32M |
| Operating Cash Flow | 238.63M | 224.41M | 237.56M | 206.24M | -2.31M | -83.69M |
| Investing Cash Flow | -28.59M | -112.12M | -120.85M | -248.60M | -62.20M | -78.97M |
| Financing Cash Flow | -276.91M | -150.67M | -56.73M | 74.03M | 5.17M | 117.71M |
Diamondrock Technical Analysis
Positive
8.06
Price Trends
7.79
Positive
7.57
Positive
8.07
Negative
Market Momentum
-0.02
Negative
58.64
Neutral
67.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DRH, the sentiment is Positive. The current price of 8.06 is above the 20-day moving average (MA) of 7.86, above the 50-day MA of 7.79, and below the 200-day MA of 8.07, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 58.64 is Neutral, neither overbought nor oversold. The STOCH value of 67.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRH.
Diamondrock Risk Analysis
Diamondrock disclosed 63 risk factors in its most recent earnings report. Diamondrock reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Diamondrock Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.26B | 20.69 | 5.00% | 4.14% | 4.81% | 185.08% | |
66 Neutral | $1.71B | 422.54 | 0.96% | 3.90% | 0.37% | -97.38% | |
63 Neutral | $6.82B | 13.21 | -0.71% | 7.17% | 3.67% | -27.43% | |
62 Neutral | $2.13B | 40.24 | 1.58% | 12.52% | -3.19% | -81.33% | |
61 Neutral | $1.62B | 28.29 | 4.22% | 5.34% | 1.72% | -3.49% | |
60 Neutral | $1.10B | 34.43 | 2.53% | 8.32% | 1.42% | -20.13% | |
55 Neutral | $1.16B | ― | -0.81% | 0.39% | 2.00% | 50.70% |
* Real Estate Sector Average
Performance Comparison
DRH
Diamondrock
8.06
0.46
6.05%
SHO
Sunstone Hotel
9.24
-0.18
-1.91%
PEB
Pebblebrook Hotel
10.25
-2.11
-17.07%
RLJ
RLJ Lodging
7.37
-1.05
-12.47%
XHR
Xenia Hotels & Resorts
13.51
1.06
8.51%
PK
Park Hotels & Resorts
11.18
-1.31
-10.49%
Diamondrock Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
DiamondRock Expands Credit Facility to $1.5 Billion
Positive
Jul 23, 2025
On July 22, 2025, DiamondRock Hospitality Company announced the successful refinancing and expansion of its senior unsecured credit facility from $1.2 billion to $1.5 billion, extending the maturity schedule and enhancing its financial flexibility. The new Credit Facility includes a $400 million revolving credit facility and three term loans totaling $1.1 billion, with maturity dates ranging from 2028 to 2030. This refinancing allows the company to repay three mortgage loans maturing in 2025, leaving it with no debt maturities until 2028 and a fully unencumbered portfolio, thereby strengthening its balance sheet and positioning it for future capital allocation opportunities.
The most recent analyst rating on (DRH) stock is a Hold with a $10.25 price target. To see the full list of analyst forecasts on Diamondrock stock, see the DRH Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.