📊 DRH Key Takeaways
Is DiamondRock Hospitality Co (DRH) a Good Investment?
DiamondRock exhibits critical financial stress with interest coverage of 0.9x (below 1.0x), indicating operating income is insufficient to cover debt service on $1.1B in long-term debt. Persistent negative free cash flow of -$18.5M combined with declining revenue (-0.8% YoY) and poor asset returns (ROA: 0.5%, ROE: 1.0%) create an unsustainable capital structure, despite modest operational efficiency gains.
DiamondRock Hospitality shows solid fundamental stability, with positive net income growth, healthy free cash flow generation, and manageable leverage supported by adequate interest coverage. However, the slight revenue decline and still-modest operating margin suggest growth quality is mixed, with earnings improvement potentially relying more on cost control and non-revenue factors than broad operating acceleration.
Why Buy DiamondRock Hospitality Co Stock? DRH Key Strengths
- Net income increased 10.7% YoY despite flat revenue, demonstrating improving operational efficiency and cost control
- EPS surged 144.4% YoY, showing significant leverage in earnings structure relative to equity base
- Moderate debt-to-equity ratio of 0.76x provides some balance sheet flexibility for a leveraged REIT
- Strong free cash flow of $203.24M with an 18.1% FCF margin
- Net income grew 10.7% YoY while interest coverage remained solid at 6.2x
- Balance sheet leverage appears manageable with debt-to-equity of 0.76x and positive equity base of $1.45B
DRH Stock Risks: DiamondRock Hospitality Co Investment Risks
- Interest coverage ratio of 0.9x is critical - operating income falls short of interest expense, creating unsustainable debt service obligation
- Negative free cash flow of -$18.5M with capital expenditures ($40.4M) exceeding operating cash flow ($21.9M), depleting liquidity reserves
- Revenue declining 0.8% YoY with extremely poor asset returns (ROA: 0.5%, ROE: 1.0%), indicating weak pricing power and capital inefficiency in hospitality operations
- Revenue declined 0.8% YoY, indicating limited top-line momentum
- Operating margin of 9.0% is relatively modest and leaves less cushion if hotel demand weakens
- Cash balance of $68.08M is not especially large relative to $1.10B in long-term debt
Key Metrics to Watch
- Interest coverage ratio - must return above 1.0x to demonstrate debt service sustainability without additional financing
- Free cash flow - trajectory must reverse to positive to support debt reduction and maintain liquidity without equity dilution
- Revenue growth and operating margin trend
- Operating cash flow relative to debt service and capital spending
DiamondRock Hospitality Co (DRH) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
DRH Profit Margin, ROE & Profitability Analysis
DRH vs Real Estate Sector: How DiamondRock Hospitality Co Compares
How DiamondRock Hospitality Co compares to Real Estate sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is DiamondRock Hospitality Co Stock Overvalued? DRH Valuation Analysis 2026
Based on fundamental analysis, DiamondRock Hospitality Co has mixed fundamental signals relative to the Real Estate sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
DiamondRock Hospitality Co Balance Sheet: DRH Debt, Cash & Liquidity
DRH Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: DiamondRock Hospitality Co's revenue has grown significantly by 20% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.36 reflects profitable operations.
DRH Revenue Growth, EPS Growth & YoY Performance
DRH Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $254.9M | $11.9M | $0.04 |
| Q3 2025 | $285.1M | $22.5M | $0.10 |
| Q2 2025 | $305.7M | $24.5M | $0.10 |
| Q1 2025 | $254.9M | $8.3M | $0.03 |
| Q3 2024 | $276.5M | $26.4M | $0.11 |
| Q2 2024 | $291.2M | $24.5M | $0.10 |
| Q1 2024 | $243.6M | $8.3M | $0.03 |
| Q3 2023 | $268.2M | $27.3M | $0.12 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
DiamondRock Hospitality Co Dividends, Buybacks & Capital Allocation
DRH SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for DiamondRock Hospitality Co (CIK: 0001298946)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778014522.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778014514.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778014508.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778014501.xml | View → |
| May 5, 2026 | 4 | xslF345X06/wk-form4_1778014492.xml | View → |
❓ Frequently Asked Questions about DRH
What is the AI rating for DRH?
DiamondRock Hospitality Co (DRH) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are DRH's key strengths?
Claude: Net income increased 10.7% YoY despite flat revenue, demonstrating improving operational efficiency and cost control. EPS surged 144.4% YoY, showing significant leverage in earnings structure relative to equity base. ChatGPT: Strong free cash flow of $203.24M with an 18.1% FCF margin. Net income grew 10.7% YoY while interest coverage remained solid at 6.2x.
What are the risks of investing in DRH?
Claude: Interest coverage ratio of 0.9x is critical - operating income falls short of interest expense, creating unsustainable debt service obligation. Negative free cash flow of -$18.5M with capital expenditures ($40.4M) exceeding operating cash flow ($21.9M), depleting liquidity reserves. ChatGPT: Revenue declined 0.8% YoY, indicating limited top-line momentum. Operating margin of 9.0% is relatively modest and leaves less cushion if hotel demand weakens.
What is DRH's revenue and growth?
DiamondRock Hospitality Co reported revenue of $258.2M.
Does DRH pay dividends?
DiamondRock Hospitality Co pays dividends, with $25.2M distributed to shareholders in the trailing twelve months.
Where can I find DRH SEC filings?
Official SEC filings for DiamondRock Hospitality Co (CIK: 0001298946) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is DRH's EPS?
DiamondRock Hospitality Co has a diluted EPS of $0.07.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is DRH a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, DiamondRock Hospitality Co has a SELL rating with 74% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is DRH stock overvalued or undervalued?
Valuation metrics for DRH: ROE of 1.0% (sector avg: 8%), net margin of 5.6% (sector avg: 20%). Compare these metrics with sector averages to assess valuation.
Should I buy DRH stock in 2026?
Our dual AI analysis gives DiamondRock Hospitality Co a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is DRH's free cash flow?
DiamondRock Hospitality Co's operating cash flow is $21.9M, with capital expenditures of $40.4M. FCF margin is -7.2%.
How does DRH compare to other Real Estate stocks?
Vs Real Estate sector averages: Net margin 5.6% (avg: 20%), ROE 1.0% (avg: 8%), current ratio N/A (avg: 1.5).