Diamondrock (DRH)
NASDAQ:DRH
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Diamondrock
(NASDAQ:DRH)
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Rating:74Outperform
Price Target:
$11.50
â–²(8.90% Upside)
Action:ReiteratedDate:05/04/26
The score is driven primarily by improving fundamentals and a constructive earnings update (raised 2026 guidance with margin/cost improvements), supported by a positive technical uptrend. These are tempered by cash-flow volatility and an elevated P/E valuation, plus some near-term demand/booking uncertainties noted on the call.
Positive Factors
Margin Expansion & Cost Discipline
Sustained expense control and operating leverage drive durable margin improvement. With wages up just 0.7% and hotel EBITDA margins expanding materially, the company can convert modest revenue gains into outsized profit growth, supporting long-term FFO and reinvestment capacity.
Negative Factors
Free Cash Flow Volatility
Material swings in FCF and limited coverage of net income indicate earnings are less cash-rich and more sensitive to capex timing and working capital. This structural variability constrains durable dividend coverage and limits predictable excess cash for buybacks or acquisitions.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Expansion & Cost Discipline
Sustained expense control and operating leverage drive durable margin improvement. With wages up just 0.7% and hotel EBITDA margins expanding materially, the company can convert modest revenue gains into outsized profit growth, supporting long-term FFO and reinvestment capacity.
Read all positive factors
Diamondrock (DRH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.10B
Dividend Yield5.13%
Average Volume (3M)1.81M
Price to Earnings (P/E)33.1
Beta (1Y)0.81
Revenue Growth-0.40%
EPS Growth136.86%
CountryUS
Employees31
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.48
Shares Outstanding204,490,590
10 Day Avg. Volume1,708,269
30 Day Avg. Volume1,814,191
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)1.28
Price to Sales (P/S)1.65
P/FCF Ratio11.40
Enterprise Value/Market Cap1.54
Enterprise Value/Revenue2.88
Enterprise Value/Gross Profit5.19
Enterprise Value/Ebitda11.63
Forecast
1Y Price Target
$10.92Price Target Upside3.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)0.53
Revenue Forecast (FY)$1.15B
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 ow...
How the Company Makes Money
DiamondRock makes money primarily by earning hotel-level operating revenue from its owned properties and retaining the resulting net operating income (NOI) after paying property-level expenses and fees. Key revenue streams include (1) rooms revenu...
Diamondrock Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 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
72
Positive
Balance Sheet
78
Positive
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.12B | 1.12B | 1.13B | 1.07B | 1.00B | 567.13M |
| Gross Profit | 624.12M | 618.35M | 617.94M | 293.11M | 569.14M | 282.14M |
| EBITDA | 278.65M | 274.64M | 228.90M | 263.33M | 260.85M | -52.13M |
| Net Income | 104.04M | 101.43M | 48.05M | 86.34M | 109.33M | -194.58M |
Balance Sheet | ||||||
| Total Assets | 3.01B | 3.00B | 3.17B | 3.24B | 3.21B | 2.97B |
| Cash, Cash Equivalents and Short-Term Investments | 39.29M | 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 | 1.56B | 1.55B | 1.57B | 1.59B | 1.61B | 1.44B |
| Stockholders Equity | 1.45B | 1.45B | 1.59B | 1.64B | 1.59B | 1.52B |
Cash Flow | ||||||
| Free Cash Flow | 161.17M | 162.09M | 142.82M | 118.55M | -43.36M | -276.07M |
| Operating Cash Flow | 237.98M | 243.65M | 224.41M | 237.56M | 206.24M | -2.31M |
| Investing Cash Flow | -76.81M | 7.46M | -112.12M | -120.85M | -248.60M | -62.20M |
| Financing Cash Flow | -235.12M | -276.68M | -150.67M | -56.73M | 74.03M | 5.17M |
Diamondrock Technical Analysis
Positive
10.56
Price Trends
9.68
Positive
9.34
Positive
8.61
Positive
Market Momentum
0.25
Negative
72.68
Negative
91.51
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 10.56 is above the 20-day moving average (MA) of 9.70, above the 50-day MA of 9.68, and above the 200-day MA of 8.61, indicating a bullish trend. The MACD of 0.25 indicates Negative momentum. The RSI at 72.68 is Negative, neither overbought nor oversold. The STOCH value of 91.51 is Negative, 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.10B | 33.11 | 6.89% | 5.13% | -0.40% | 136.86% | |
69 Neutral | $1.84B | 58.58 | 1.23% | 3.98% | 6.00% | -69.40% | |
69 Neutral | $1.47B | 17.29 | 5.33% | 3.71% | 2.31% | 208.08% | |
68 Neutral | $1.27B | -793.68 | 1.29% | 7.76% | -1.43% | -94.61% | |
67 Neutral | $1.57B | -18.57 | -2.49% | 0.34% | 2.84% | -83.41% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $2.22B | 47.62 | -8.42% | 13.10% | -2.20% | -280.33% |
* Real Estate Sector Average
DRH
Diamondrock
10.23
3.12
43.94%
SHO
Sunstone Hotel
9.71
1.73
21.72%
PEB
Pebblebrook Hotel
13.89
5.02
56.63%
RLJ
RLJ Lodging
8.35
1.92
29.86%
XHR
Xenia Hotels & Resorts
15.95
5.16
47.86%
PK
Park Hotels & Resorts
11.04
2.00
22.18%
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...
Business Operations and StrategyStock BuybackFinancial Disclosures
DiamondRock Highlights Strategy to Drive Long-Term Shareholder Value
Positive
Mar 2, 2026
DiamondRock Hospitality has released a March 2026 investor presentation outlining its strategy to drive long-term shareholder value through disciplined capital allocation, cost control and portfolio optimization. The company highlights initiatives...
Executive/Board ChangesShareholder Meetings
DiamondRock Announces Board Leadership Transition and Succession Plan
Neutral
Feb 25, 2026
DiamondRock Hospitality said on February 25, 2026, that longtime Chairman and founder William W. McCarten will retire from its board at the end of his current term, effective at the close of the April 29, 2026 annual shareholder meeting. McCarten,...
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.