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Diamondrock
(NASDAQ:DRH)
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Rating:73Outperform
Price Target:
$14.50
â–²(12.84% Upside)
Action:Reiterated
Date:07/31/26
DRH scores positively on financial performance and the earnings call: improved profitability, steady free cash flow, and raised 2026 guidance with margin expansion are the biggest drivers. Technicals also support the score with price above key moving averages. The main constraint is valuation, as the P/E appears elevated despite a moderate dividend yield.
Positive Factors
Consistent cash generation (FFO & FCF)
DiamondRock’s multi-year positive cash generation (TTM OCF ~$244M, FCF ~$163M) supports recurring distributions, funds capital recycling and capex, and provides flexibility for buybacks or debt reduction. Sustained FCF coverage improves resilience through lodging cycles and underpins strategic investments.
Negative Factors
Moderate-to-elevated leverage; data inconsistency
Leverage around three-quarters of equity is typical for lodging REITs but limits downside flexibility in downturns and raises refinancing sensitivity. The reported inconsistency in TTM debt figures adds uncertainty to covenant and liquidity assessment, warranting conservative risk premiums when planning capital moves.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent cash generation (FFO & FCF)
DiamondRock’s multi-year positive cash generation (TTM OCF ~$244M, FCF ~$163M) supports recurring distributions, funds capital recycling and capex, and provides flexibility for buybacks or debt reduction. Sustained FCF coverage improves resilience through lodging cycles and underpins strategic investments.
Read all positive factors
Diamondrock (DRH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.72B
Dividend Yield3.17%
Average Volume (3M)2.36M
Price to Earnings (P/E)18.1
Beta (1Y)0.78
Revenue Growth1.03%
EPS Growth159.56%
CountryUS
Employees35
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.73
Shares Outstanding204,605,680
10 Day Avg. Volume2,525,599
30 Day Avg. Volume2,358,194
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)1.28
Price to Sales (P/S)1.65
P/FCF Ratio11.40
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$12.78Price Target Upside-0.54% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)0.56
Revenue Forecast (FY)$1.14B
Diamondrock Business Overview & Revenue Model
Company Description
DiamondRock Hospitality Company (DRH) operates as an internally managed real estate investment trust (REIT), maintaining a distinguished and geographically varied portfolio of hotels. These properties are strategically concentrated in key urban ga...
How the Company Makes Money
DiamondRock primarily makes money by owning hotel real estate and earning hotel-level operating cash flows generated at its properties. Its main revenue stream is room revenue (daily guest room rates multiplied by occupied rooms), supplemented by ...
Diamondrock Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial picture: Q1 outperformed expectations with modest RevPAR growth, meaningful margin expansion, strong ROI project outcomes (notably Sedona and The Dagny), conservative balance sheet positioning, and upgraded guidance for 2026. Challenges were noted—primarily near-term group softness driven by weather and tough comps, a small occupancy decline, and event-related booking/displacement risk—but management provided concrete mitigation strategies (expense discipline, capital recycling, transient strategies) and reiterated multi-year capital plans. On balance, highlights materially outweigh the lowlights.Positive Updates
Q1 Results Above Expectations
First quarter results exceeded expectations with comparable RevPAR up 2.0% and total RevPAR up 2.5%. Corporate adjusted EBITDA was $60.6 million and adjusted FFO per share was $0.22.
Negative Updates
Group Revenue Softness and Weather Headwinds
Group room revenues declined 0.8% in Q1 with room nights down 4.2% (rates up 3.5%). Winter storms in the Eastern U.S. and limited snow in the ski market negatively impacted group travel in January and February.
Read all updates
Q1-2026 Updates
Positive
Negative
Q1 Results Above Expectations
First quarter results exceeded expectations with comparable RevPAR up 2.0% and total RevPAR up 2.5%. Corporate adjusted EBITDA was $60.6 million and adjusted FFO per share was $0.22.
Read all positive updates
Company Guidance
DiamondRock raised its 2026 guidance, increasing RevPAR guidance by 50 bps to a 1.5%–3.5% range (midpoint 2.5%) with total RevPAR pegged 25 bps higher (midpoint ~2.75%); adjusted EBITDA is now $296M–$308M (midpoint $302M, ~+2.5% at the midpoint versus prior), adjusted FFO per share $1.12–$1.18 (midpoint $1.15), and the company expects capital expenditures of $80M–$90M this year (and $80M–$100M per year over the next five years, ~7%–9% of revenue). Trailing‑12‑month free cash flow per share was $0.75 (up 19% YoY) and management expects ~7% free‑cash‑flow‑per‑share growth in 2026; Q1 delivered corporate adjusted EBITDA of $60.6M, adjusted FFO per share of $0.22, and an FFO margin improvement of 225 bps. The raise reflects stronger Q1 performance and a ~$1M full‑year benefit from a favorable April 1 insurance renewal (premiums down ~40% over three years); balance‑sheet metrics highlighted no debt maturities until 2029, lower‑end leverage versus peers, one hotel under contract to close in Q2 (proceeds may fund opportunistic buybacks), and a dividend cadence (Q1 common dividend $0.09; company said it expects to declare quarterly dividends totaling $0.90 per share for the remainder of the year) with payout ratio set to rise as remaining NOLs (about 50% used) are consumed.Diamondrock Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
64
Positive
Cash Flow
76
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.14B | 1.12B | 1.13B | 1.07B | 1.00B | 567.13M |
| Gross Profit | 613.44M | 618.35M | 617.94M | 293.11M | 569.14M | 282.14M |
| EBITDA | 330.08M | 274.64M | 228.90M | 263.33M | 260.85M | -52.13M |
| Net Income | 153.69M | 101.43M | 48.05M | 86.34M | 109.33M | -194.58M |
Balance Sheet | ||||||
| Total Assets | 3.07B | 3.00B | 3.17B | 3.24B | 3.21B | 2.97B |
| Cash, Cash Equivalents and Short-Term Investments | 105.98M | 68.08M | 81.38M | 121.59M | 67.56M | 38.62M |
| Total Debt | 1.20B | 1.19B | 1.18B | 1.29B | 1.30B | 1.18B |
| Total Liabilities | 1.54B | 1.55B | 1.57B | 1.59B | 1.61B | 1.44B |
| Stockholders Equity | 1.52B | 1.45B | 1.59B | 1.64B | 1.59B | 1.52B |
Cash Flow | ||||||
| Free Cash Flow | 163.44M | 162.09M | 142.82M | 118.55M | -43.36M | -276.07M |
| Operating Cash Flow | 243.99M | 243.65M | 224.41M | 237.56M | 206.24M | -2.31M |
| Investing Cash Flow | -50.68M | 7.46M | -112.12M | -120.85M | -248.60M | -62.20M |
| Financing Cash Flow | -151.01M | -276.68M | -150.67M | -56.73M | 74.03M | 5.17M |
Diamondrock Technical Analysis
Positive
12.85
Price Trends
12.11
Positive
11.04
Positive
9.97
Positive
Market Momentum
0.37
Negative
66.90
Neutral
58.77
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 12.85 is above the 20-day moving average (MA) of 12.71, above the 50-day MA of 12.11, and above the 200-day MA of 9.97, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 66.90 is Neutral, neither overbought nor oversold. The STOCH value of 58.77 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 51 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.72B | 18.12 | 10.27% | 3.27% | 1.03% | 159.56% | |
68 Neutral | $2.16B | -28.51 | -1.90% | 0.21% | 2.08% | -25.62% | |
67 Neutral | $1.87B | -1,189.32 | 1.14% | 4.86% | -0.83% | -103.51% | |
66 Neutral | $3.03B | -13.88 | -6.59% | 6.78% | -2.20% | -280.33% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $2.19B | 83.36 | 1.94% | 3.07% | 6.83% | 23.48% | |
63 Neutral | $1.90B | -275.13 | -0.62% | 2.61% | 1.65% | -112.43% |
* Real Estate Sector Average
DRH
Diamondrock
13.26
5.98
82.09%
SHO
Sunstone Hotel
11.68
3.24
38.39%
PEB
Pebblebrook Hotel
19.09
9.25
94.02%
RLJ
RLJ Lodging
12.32
5.51
80.86%
XHR
Xenia Hotels & Resorts
20.46
8.18
66.63%
PK
Park Hotels & Resorts
14.94
5.44
57.26%
Diamondrock Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
DiamondRock Sells New York Courtyard, Updates 2026 Outlook
Negative
May 4, 2026
DiamondRock Hospitality Company, a U.S. lodging-focused REIT with a portfolio of 34 premium hotels and resorts in key leisure and gateway markets, continues to balance branded and independent lifestyle assets in its strategy. The company operates ...
Business Operations and StrategyStock BuybackFinancial DisclosuresShareholder Meetings
DiamondRock Shareholders Back Board, Executive Pay and Auditor
Positive
Apr 30, 2026
DiamondRock Hospitality reported strong first-quarter 2026 results on April 30, with net income attributable to common stockholders rising 54.3% to $14.5 million, or $0.07 per diluted share, and adjusted EBITDA increasing 8% to $60.6 million versu...
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.