Darling Ingredients (DAR) AI Stock Analysis

• Market Cap: $4.92B
• Dividend Yield: N/A
• Average Volume (3M): 2.49M
• Price to Earnings (P/E): 48.2
• Beta (1Y): 0.75
• Revenue Growth: -6.25%
• EPS Growth: -71.35%
• Country: US
• Employees: 15,500
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.08
• Shares Outstanding: 158,185,900
• 10 Day Avg. Volume: 2,778,672
• 30 Day Avg. Volume: 2,486,142
• PEG Ratio: -0.34
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 10.55
• Enterprise Value/Market Cap: 2.09
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 7.87
• Enterprise Value/Ebitda: 12.81
• 1Y Price Target: $46.33
• Price Target Upside: 47.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 61 Neutral
• Price Target: $34.00 ▲(8.18% Upside)

Darling Ingredients' overall score reflects strong revenue growth and strategic initiatives, but is tempered by declining profit margins, high valuation, and technical weakness. The mixed earnings call outlook further impacts the score.

Positive Factors

Strategic Joint Venture

The formation of Nextida aligns with Darling's strategy to diversify into high-margin, high-growth sectors, enhancing long-term revenue potential and market positioning.

Financial Flexibility

Refinancing provides financial stability and flexibility, allowing Darling to invest in growth opportunities and manage debt efficiently over the long term.

Improvement in Gross Margins

Improved gross margins indicate better cost management and pricing power, which can enhance profitability and competitive advantage over time.

Negative Factors

Decline in EBITDA

A decline in EBITDA suggests challenges in maintaining operational efficiency and profitability, potentially impacting long-term financial performance.

Challenges in Renewable Fuel Segment

Difficulties in the renewable fuel segment could hinder growth prospects in a key strategic area, affecting future revenue and margin expansion.

Net Income Decrease

A significant drop in net income reflects reduced profitability, which may challenge the company's ability to reinvest in growth and maintain shareholder returns.

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 sale of its various products, which are categorized into several key segments. The largest revenue stream comes from the sale of protein meals and animal fats used in livestock feed and pet food. Additionally, the company earns income from the processing of food waste and by-products, converting them into usable materials for various industries. Darling also benefits from partnerships with food manufacturers and agricultural companies that supply raw materials for processing. The growing demand for sustainable and renewable products further enhances its revenue potential, particularly in the bioenergy sector, where it produces renewable diesel and other biofuels from waste materials.

Darling Ingredients Financial Statement Overview

Summary

Darling Ingredients shows strong revenue growth and efficient cash flow management, but faces challenges with declining profit margins and reduced return on equity. The company's leverage is manageable, supporting long-term financial stability.

Income Statement

Darling Ingredients has shown a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a gross profit margin of 20.76% and a net profit margin of 1.85%, which are lower than previous years, reflecting challenges in maintaining profitability. The revenue growth rate of 48% in the TTM period is strong, but the EBIT and EBITDA margins have declined, suggesting increased operational costs or pricing pressures.

Balance Sheet

The company's balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.99 in the TTM period, indicating manageable leverage. The return on equity (ROE) has decreased to 2.39%, reflecting reduced profitability. However, the equity ratio remains robust, suggesting a solid capital structure.

Cash Flow

Cash flow analysis shows a positive trajectory with a free cash flow growth rate of 5.03% in the TTM period. The operating cash flow to net income ratio is strong at 3.11, indicating efficient cash generation relative to net income. The free cash flow to net income ratio of 0.67 suggests a healthy conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.70B	5.72B	6.79B	6.53B	4.74B	3.57B
Gross Profit	1.30B	1.28B	1.65B	1.53B	1.24B	883.11M
EBITDA	801.44M	1.01B	1.48B	1.41B	1.20B	776.48M
Net Income	105.36M	278.88M	647.73M	737.69M	650.91M	296.82M
Balance Sheet
Total Assets	10.27B	10.07B	11.06B	9.20B	6.13B	5.61B
Cash, Cash Equivalents and Short-Term Investments	94.58M	75.97M	126.50M	127.02M	68.91M	81.62M
Total Debt	4.22B	4.26B	4.64B	3.58B	1.62B	1.66B
Total Liabilities	5.58B	5.61B	6.37B	5.31B	2.79B	2.66B
Stockholders Equity	4.61B	4.38B	4.61B	3.81B	3.28B	2.89B
Cash Flow
Free Cash Flow	548.93M	506.81M	342.26M	420.94M	430.02M	340.73M
Operating Cash Flow	823.63M	839.29M	899.26M	813.74M	704.42M	624.65M
Investing Cash Flow	-270.62M	-498.90M	-1.68B	-2.42B	-490.26M	-310.63M
Financing Cash Flow	-583.12M	-399.56M	876.29M	1.68B	-221.36M	-306.99M

Darling Ingredients Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.43
• 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 31.43 is below the 20-day moving average (MA) of 32.11, below the 50-day MA of 32.61, and below the 200-day MA of 33.85, indicating a bearish trend. The MACD of -0.35 indicates Positive momentum. The RSI at 45.45 is Neutral, neither overbought nor oversold. The STOCH value of 8.70 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	79 Outperform	5.31B	8.77	21.28%	14.34%	-1.19%	78.79%
PPC	79 Outperform	9.81B	7.86	33.10%	―	2.06%	63.27%
INGR	69 Neutral	7.84B	11.92	15.91%	2.64%	-5.16%	4.95%
LW	68 Neutral	7.49B	21.48	20.56%	2.78%	-0.25%	-49.73%
DAR	61 Neutral	$4.92B	48.18	2.32%	―	-6.25%	-71.35%
BRBR	60 Neutral	4.61B	20.94	-73.67%	―	16.27%	5.13%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%