Diamondrock (DRH) AI Stock Analysis

• Market Cap: $1.65B
• Dividend Yield: 5.72%
• Average Volume (3M): 2.84M
• Price to Earnings (P/E): 28.9
• Beta (1Y): 1.05
• Revenue Growth: 1.72%
• EPS Growth: -3.49%
• Country: US
• Employees: 31
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Hotel & Motel
• EPS (TTM): 0.10
• Shares Outstanding: 204,954,590
• 10 Day Avg. Volume: 3,316,907
• 30 Day Avg. Volume: 2,837,010
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 3.11
• Enterprise Value/Ebitda: 10.57
• 1Y Price Target: $9.08
• Price Target Upside: 10.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $8.50 ▲(3.53% Upside)

The overall stock score of 63.25 reflects a company with solid financial foundations but facing challenges in revenue growth and profitability. Technical indicators suggest caution, while valuation metrics indicate potential overvaluation despite a strong dividend yield. The earnings call highlights strategic initiatives but also underscores ongoing challenges, particularly in the resort segment.

Positive Factors

Cash Flow Generation

The increase in free cash flow per share indicates improved cash generation, providing the company with more flexibility for strategic investments and debt management.

Urban Portfolio Performance

Strong performance in urban markets suggests robust demand and effective management, supporting long-term revenue stability and growth potential in these key areas.

Successful Refinancing

Refinancing enhances financial flexibility and reduces interest costs, allowing DiamondRock to invest in growth opportunities and manage its capital structure more efficiently.

Negative Factors

Resort Portfolio Decline

The decline in the resort portfolio's RevPAR reflects challenges in maintaining occupancy and pricing power, potentially impacting overall revenue and profitability.

Leisure Transient Revenue Decline

A decline in leisure transient revenue indicates potential weakness in a key market segment, which could affect future revenue growth if not addressed.

Anticipated RevPAR Decline

Anticipated RevPAR decline suggests ongoing challenges in maintaining revenue growth, which could pressure margins and profitability in the near term.

Diamondrock Business Overview & Revenue Model

Company Description

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.

How the Company Makes Money

DiamondRock 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 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 8.21
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 8.21 is above the 20-day moving average (MA) of 7.83, above the 50-day MA of 8.01, and above the 200-day MA of 7.79, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 65.78 is Neutral, neither overbought nor oversold. The STOCH value of 90.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DRH.

Diamondrock Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
DRH	63 Neutral	$1.65B	28.87	4.22%	5.72%	1.72%	-3.49%
SHO	61 Neutral	$1.70B	419.72	0.96%	3.88%	0.37%	-97.38%
RLJ	58 Neutral	$1.03B	32.47	2.53%	8.75%	1.42%	-20.13%
XHR	58 Neutral	$1.19B	22.38	4.58%	4.21%	4.29%	141.01%
PEB	52 Neutral	$1.22B	-17.90	-3.74%	0.38%	0.99%	-360.58%
PK	52 Neutral	$1.99B	―	-0.36%	13.05%	-3.57%	-104.55%

Diamondrock Corporate Events

DiamondRock Prepays Mortgage Loan for Westin Boston

On September 5, 2025, DiamondRock Hospitality Company prepaid a $166.2 million mortgage loan for the Westin Boston Seaport District, resulting in all of the company’s debt becoming fully unsecured and prepayable at any time. This strategic financial move is part of DiamondRock’s broader efforts to optimize capital allocation, enhance shareholder value, and position itself for continued growth in the hospitality sector.

The most recent analyst rating on (DRH) stock is a Hold with a $8.56 price target. To see the full list of analyst forecasts on Diamondrock stock, see the DRH Stock Forecast page.

DiamondRock Hospitality’s Earnings Call: Achievements and Challenges

DiamondRock Hospitality’s latest earnings call presented a balanced sentiment, highlighting both achievements and challenges. The company celebrated positive financial milestones, such as share repurchases and successful refinancing, while also addressing hurdles in resort portfolio performance, occupancy, and RevPAR growth. Despite these challenges, DiamondRock remains optimistic about future opportunities.

DiamondRock Hospitality Reports Strong Q2 2025 Results

DiamondRock Hospitality Company is a real estate investment trust (REIT) that owns a diverse portfolio of 36 premium hotels and resorts across the United States, focusing on leisure destinations and major gateway markets.