DiamondRock Hospitality Company (DRH): What Does Valuation Ratios Tell Us?


DiamondRock Hospitality Company (NYSE:DRH) saw an upside of 1.04% to $9.22 after adding $0.1 on Wednesday. The 5-day average trading volume is 980,328 shares of the company’s common stock. It has gained $9.27 in the past week and touched a new high 5 times within the past 5 days. An average of 1,307,517 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 1,446,523.

DRH’s 1-month performance is 13.44% or $0.98 on its low of $7.82 reached on 01/05/23. The company’s shares have touched a 52-week low of $7.15 and high of $11.10, with the stock’s rally to the 52-week high happening on 01/25/23. YTD, DRH has achieved 11.36% or $1.01 and has reached a new high 9 times. However, the current price is down -17.01% from the 52-week high price.

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Valuation Metrics

DRH stock has a beta of 1.63. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 1.98 while the price-to-book (PB) in the most recent quarter is 1.22, with the price to cash flow ratio at 13.92.

As well, the company’s long term debt to equity for the quarter ending September 29 was 0.86, while the total debt to equity was 0.86. In terms of profitability, the gross margin trailing 12 months is 30.30%. The firm’s gross profit as reported stood at -$156.04 million against revenue of $567.13 million.

Earnings Surprise

For the quarterly period ending September 29 this year, Net income and sales went down compared to those figures reported in the previous quarter. Net income grew 116.23% to $26.0 million, while revenue of $50.06 million was -92.54% off the previous quarter. Analysts expected DRH to announce $0.14 per share in earnings in its latest quarter, but it posted $0.12, representing a -14.30% surprise. EBITDA for the quarter stood at more than $75.44 million. Shareholders hold equity totaling $209.38 million.

Let’s look briefly at DiamondRock Hospitality Company (DRH) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 24 January was 72.95% to suggest the stock is trending Overbought, with historical volatility in this time period at 22.94%.

The stock’s 5-day moving average is $8.99, reflecting a +6.92% or $0.59 change from its current price. DRH is currently trading +12.00% above its 20-day SMA, +5.33% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by +2.85% and SMA200 by-0.05%.

Stochastic %K and %D was 97.66% and 97.47% and the average true range (ATR) pointed at 0.24. The RSI (14) points at 65.11%, while the 14-day stochastic is at 94.50% with the period’s ATR at 0.25. The stock’s 9-day MACD Oscillator is pointing at 0.27 and 0.54 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for DiamondRock Hospitality Company (NYSE: DRH), Morgan Stanley launched coverage with an Equal-weight rating. Analysts offering their rating for DRH stock have a consensus rating for the stock as Hold. Currently, 0 brokerage advisors rate DRH as a “sell,”, while 8 advise that investors “Hold.” 1 analysts have rated the stock as underweight. 2 rates the stock as overweight while 2 have offered a “buy” rating.

What is DRH’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $9.00 and a high of $12.00, with their median price target at $10.50. Looking at these predictions, the average price target given by analysts is for DiamondRock Hospitality Company (DRH) stock is $10.41.


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