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Diamondrock
(NASDAQ:DRH)
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Rating:73Outperform
Price Target:
$14.00
â–²(8.78% Upside)
Action:Reiterated
Date:10/08/26
DRH scores well primarily on improved financial performance and strong recent management messaging (raised guidance, margin gains, and a dividend increase). Valuation and corporate actions are supportive, while the technical picture is only neutral-to-mildly positive and balance-sheet interpretation is tempered by leverage concerns and reported-data inconsistency.
Positive Factors
RevPAR Growth and Margin Expansion
Comparable RevPAR growth and operating leverage show improving demand capture and cost discipline across the portfolio. Raised 2026 EBITDA and FFO guidance provides a forward indicator that management expects these gains to persist beyond a single quarter.
Negative Factors
Leverage and Balance-Sheet Uncertainty
Debt-to-equity around 0.74–0.82 limits flexibility if lodging conditions weaken, while conflicting debt reporting requires conservative interpretation. Even with improved ROE, leverage can constrain capital allocation and increase the importance of maintaining strong property-level cash flow.
Read all positive and negative factors
Positive Factors
Negative Factors
RevPAR Growth and Margin Expansion
Comparable RevPAR growth and operating leverage show improving demand capture and cost discipline across the portfolio. Raised 2026 EBITDA and FFO guidance provides a forward indicator that management expects these gains to persist beyond a single quarter.
Read all positive factors
Diamondrock (DRH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.62B
Dividend Yield3.52%
Average Volume (3M)2.98M
Price to Earnings (P/E)17.5
Beta (1Y)0.66
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. Volume3,312,524
30 Day Avg. Volume2,980,891
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 Cap1.36
Enterprise Value/Revenue3.14
Enterprise Value/Gross Profit5.81
Enterprise Value/Ebitda10.80
Forecast
1Y Price Target
$13.56Price Target Upside5.38% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)0.78
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 income that flows to the REIT after property operating expenses and operator/brand fees. Key revenue streams include (1) room revenue: income from sell...
Diamondrock Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive operational and financial picture: strong RevPAR growth, meaningful margin expansion, robust adjusted EBITDA and FFO metrics, conservative balance sheet positioning, raised 2026 guidance, and a meaningful dividend increase. Management highlighted durable demand across leisure, transient and group channels, notable outperformance at resort assets (especially L'Auberge de Sedona), and continued focus on cost discipline and productivity. Near-term cautions include reliance on a one-time property tax settlement, pockets of group volatility (notably Q3 and an August group hole), elevated transaction competition limiting attractive acquisition opportunities, and an expected modest uptick in expense growth in H2 driven by labor and other accruals. On balance, the positives (strong operating results, raised guidance, cash-flow and balance sheet optionality) outweigh the near-term uncertainties.Positive Updates
Strong Top-Line Revenue Performance (RevPAR)
Comparable RevPAR grew 7.0% in Q2 with monthly progression (April & May ~5.5%, June +10.1%). World Cup contributed ~90 bps to Q2 RevPAR and is now expected to contribute ~30 bps for the full year (vs prior 20 bps estimate).
Negative Updates
One-Time Property Tax Benefit
Q2 results benefited from settlement of multiyear property tax appeals on two Chicago hotels totaling $6.9M (approximately $0.03 per share). This is a non-recurring benefit that inflates reported quarterly performance.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Revenue Performance (RevPAR)
Comparable RevPAR grew 7.0% in Q2 with monthly progression (April & May ~5.5%, June +10.1%). World Cup contributed ~90 bps to Q2 RevPAR and is now expected to contribute ~30 bps for the full year (vs prior 20 bps estimate).
Read all positive updates
Company Guidance
DiamondRock raised its 2026 outlook, now expecting RevPAR growth of 2.5%–4.0% (midpoint +75 bps) with Q4 stronger than Q3 and a modest World Cup tailwind of ~30 bps for the year; management guided adjusted EBITDA of $310–$320 million, adjusted FFO per share of $1.18–$1.23, and capital expenditures of $75–$85 million, while increasing the quarterly common dividend 22% to $0.11 and stating the raised guidance implies roughly 18% growth in free cash flow per share (trailing 12‑month free cash flow per diluted share was up ~27% YoY to $0.80). The company also noted H2 group pace ≈ +1% (Q3 essentially flat, Q4 led strength), emphasized a conservative balance sheet with no debt maturities until 2029, no secured/convertible/preferred or off‑balance‑sheet encumbrances, leverage at the low end of peers and roughly $500 million of incremental investment capacity per additional turn of leverage.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
12.87
Price Trends
12.37
Positive
12.11
Positive
10.82
Positive
Market Momentum
0.09
Negative
63.88
Neutral
65.73
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 12.87 is above the 20-day moving average (MA) of 12.37, above the 50-day MA of 12.37, and above the 200-day MA of 10.82, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 63.88 is Neutral, neither overbought nor oversold. The STOCH value of 65.73 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 | $2.62B | 17.49 | 10.27% | 3.52% | 1.03% | 159.56% | |
70 Outperform | $15.58B | 15.47 | 15.54% | 7.34% | 4.93% | 58.04% | |
66 Neutral | $3.05B | -18.51 | -5.14% | 6.59% | -1.36% | -405.10% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $2.17B | -28.67 | -1.90% | 0.21% | 2.08% | -25.62% | |
64 Neutral | $2.13B | 46.39 | 2.76% | 3.15% | 7.28% | 945.58% | |
60 Neutral | $1.67B | -241.98 | -0.62% | 3.09% | 1.65% | -112.43% |
* Real Estate Sector Average
DRH
Diamondrock
12.78
5.46
74.61%
SHO
Sunstone Hotel
11.44
2.79
32.18%
HST
Host Hotels & Resorts
22.74
7.68
50.98%
PEB
Pebblebrook Hotel
19.21
8.94
87.03%
XHR
Xenia Hotels & Resorts
18.10
5.82
47.43%
PK
Park Hotels & Resorts
15.17
5.21
52.31%
Diamondrock Corporate Events
Business Operations and StrategyM&A Transactions
DiamondRock Acquires Luxury Bellmoor Inn & Spa Resort
Positive
Oct 8, 2026
On October 1, 2026, DiamondRock Hospitality Company completed the $31 million acquisition of The Bellmoor Inn Spa, a 79-room luxury resort in Rehoboth Beach, Delaware, paying about $392,000 per key and funding the deal entirely with cash on hand....
Business Operations and StrategyFinancial Disclosures
DiamondRock Highlights 2026 Strategy and Growth Outlook
Positive
Sep 10, 2026
DiamondRock announced an investor presentation in September 2026 outlining its strategy and operating performance, highlighting that it is the only lodging REIT projecting hotel EBITDA and AFFO margin growth across 2024, 2025 and 2026. Management ...
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.