Core Insights - DiamondRock Hospitality (DRH) reported revenue of $254.85 million for the quarter ended March 2025, reflecting a decrease of 0.6% year-over-year and a revenue surprise of -2.01% compared to the Zacks Consensus Estimate of $260.08 million [1] - The company's EPS was $0.19, significantly higher than the $0.03 reported in the same quarter last year, resulting in an EPS surprise of +11.76% against the consensus estimate of $0.17 [1] Revenue Breakdown - Other Revenues amounted to $24.89 million, slightly exceeding the average estimate of $24.80 million, marking a year-over-year increase of +1.5% [4] - Food and Beverage Revenues were reported at $66.84 million, below the average estimate of $69.01 million, indicating a year-over-year decline of -2.3% [4] - Room Revenues totaled $163.12 million, also falling short of the average estimate of $165.03 million, with a minimal year-over-year decrease of -0.2% [4] Stock Performance - Over the past month, shares of DiamondRock Hospitality have declined by -6.9%, contrasting with the Zacks S&P 500 composite's decrease of -0.7% [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - DiamondRock Hospitality (DRH) reported quarterly funds from operations (FFO) of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, and up from $0.17 per share a year ago [1][2]. Financial Performance - The quarterly FFO surprise was 11.76%, and the company had a previous quarter surprise of 14.29% with an actual FFO of $0.24 per share against an expected $0.21 [2]. - Revenues for the quarter ended March 2025 were $254.85 million, missing the Zacks Consensus Estimate by 2.01%, and down from $256.42 million year-over-year [3]. - Over the last four quarters, the company has surpassed consensus FFO estimates three times and revenue estimates two times [2][3]. Stock Performance and Outlook - DiamondRock Hospitality shares have declined approximately 18.7% since the beginning of the year, compared to a 5.3% decline in the S&P 500 [4]. - The future stock price movement will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][5]. Estimate Revisions and Industry Context - The estimate revisions trend for DiamondRock Hospitality is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [7]. - The current consensus FFO estimate for the upcoming quarter is $0.33 on revenues of $309.56 million, and for the current fiscal year, it is $0.98 on revenues of $1.14 billion [8]. - The REIT and Equity Trust - Other industry is ranked in the bottom 35% of over 250 Zacks industries, suggesting potential challenges for stock performance [9].

COMPANY CONTACT Briony Quinn Chief Financial Officer (240) 744-1196 DIAMONDROCK HOSPITALITY COMPANY REPORTS FIRST QUARTER 2025 RESULTS Q1 Comparable RevPAR Increases 2.0% Declares Second Quarter 2025 Dividends BETHESDA, Maryland, Thursday, May 1, 2025 – DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging real estate investment trust that owns a portfolio of 36 premium hotels and resorts in the United States, today announced results of operations for the quarter ended March 31, 2025. Highl ...

DiamondRock Hospitality (DRH) shares soared 13.8% in the last trading session to close at $7.28. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 19.1% loss over the past four weeks.The increased investor optimism in the stock can be attributed to President Donald Trump’s recent announcement to put a 90-day pause on the reciprocal tariff for most countries.This hotel and resort real estate investment trust is expected to post quar ...

Core Viewpoint - DiamondRock Hospitality Company will report its financial results for the first quarter of 2025 on May 1, 2025, and will hold a conference call to discuss these results on May 2, 2025 [1]. Company Overview - DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that owns a diversified portfolio of hotels, primarily located in leisure destinations and major gateway markets [4]. - The company currently owns 36 premium quality hotels and resorts, totaling approximately 9,600 rooms [4]. - The portfolio includes properties operated under leading global brand families as well as independent boutique hotels in the lifestyle segment [4].

Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of DiamondRock Hospitality (DRH) and Omega Healthcare Investors (OHI) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision tr ...

Core Viewpoint - The article compares DiamondRock Hospitality (DRH) and Sunstone Hotel Investors (SHO) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - DiamondRock Hospitality has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Sunstone Hotel Investors has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that DRH is likely experiencing a more favorable earnings outlook [3][7] Group 2: Valuation Metrics - DRH has a forward P/E ratio of 7.88, significantly lower than SHO's forward P/E of 10.95, indicating that DRH may be undervalued [5] - The PEG ratio for DRH is 1.95, while SHO's PEG ratio is 2.15, suggesting that DRH has a better valuation relative to its expected earnings growth [5] - DRH's P/B ratio is 1.07 compared to SHO's P/B of 1.15, further supporting the notion that DRH is more attractively valued [6] - Based on these metrics, DRH earns a Value grade of A, while SHO receives a Value grade of C, highlighting DRH's superior valuation profile [6]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, utilizing established valuation metrics to uncover potential opportunities [2]. Company Summary: DiamondRock Hospitality (DRH) - DRH currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [4]. - The stock has a P/E ratio of 7.96, significantly lower than the industry average of 15.52, suggesting it may be undervalued [4]. - DRH's Forward P/E has fluctuated between 7.69 and 10.15 over the past 12 months, with a median of 8.65 [4]. - The PEG ratio for DRH is 1.96, compared to the industry average of 2.33, indicating favorable growth expectations relative to its valuation [5]. - The P/B ratio stands at 1.07, which is lower than the industry average of 1.67, further supporting the notion of undervaluation [6]. - DRH's P/S ratio is 1.52, significantly below the industry average of 4.02, reinforcing its attractiveness as a value stock [7]. - The P/CF ratio is 10.57, compared to the industry average of 15.58, highlighting DRH's strong cash flow outlook [8]. - Overall, these metrics suggest that DRH is likely undervalued and presents an impressive value opportunity at this time [9].

DiamondRock Hospitality Company (NYSE:DRH) Q4 2024 Earnings Conference Call February 28, 2025 10:00 AM ET Company Participants Briony Quinn - Chief Financial Officer Jeff Donnelly - Chief Executive Officer Justin Leonard - President and COO Conference Call Participants Dori Kesten - Wells Fargo Securities Austin Wurschmidt - KeyBanc Capital Markets Smedes Rose - Citi Michael Bellisario - Baird Floris van Dijkum - Compass Point LLC Operator Please be advised that today's conference is being recorded. I would ...

Portfolio and Operations - As of December 31, 2024, DiamondRock Hospitality Company owned a portfolio of 37 premium hotels and resorts with a total of 10,004 guest rooms located in 26 markets across the United States[26]. - Over 97% of revenues for the year ended December 31, 2024, were derived from core urban and resort destination hotels[36]. - The company has completed rebrandings at six hotels since 2021 and is currently rebranding one additional hotel[39]. - As of December 31, 2024, 34 of the 37 hotels were unencumbered by mortgage debt, indicating a conservative capital structure[42]. - The company’s strategy includes aggressive asset management and disciplined capital allocation to high-quality lodging properties[32]. - The company evaluates each hotel to assess optimal brand and management strategies, leveraging global hotel brands for increased revenue[38]. - 36 hotels are currently operated, with 19 under franchise agreements with Marriott, Hilton, or IHG[113]. - The company holds leasehold interests in 8 hotels, which may complicate financing and limit growth potential[121]. Financial Performance and Strategy - The company aims to deliver long-term stockholder returns that exceed those generated by peers through dividends and capital appreciation[28]. - The company maintains a conservative debt profile with a focus on balance sheet flexibility and low leverage[43]. - The company plans to pursue strategic acquisitions that create value in the near term and evaluate opportunities to dispose of non-core hotels[40]. - The company carries comprehensive property and liability insurance, including coverage for business interruption and natural disasters, but may incur losses from uninsured risks[63]. - The company has significant exposure to natural disasters, with 72% of total revenues in 2024 coming from hotels in metropolitan areas prone to such risks[101]. - The company expects to qualify as a REIT for the taxable year ended December 31, 2024, but cannot assure continued qualification due to complex requirements and potential changes in laws[156]. - To maintain REIT status, the company must distribute at least 90% of its REIT taxable income, which may require borrowing or selling assets if cash flow does not meet distribution needs[160]. Market and Economic Risks - The lodging industry is highly cyclical and linked to macroeconomic indicators such as U.S. GDP growth and consumer confidence, which can adversely affect the company's revenues and profitability[76]. - The company faces significant competition in the hotel market, with risks of over-building leading to decreased RevPAR and profitability[77]. - The increased use of third-party internet travel intermediaries and alternative lodging channels like Airbnb could negatively impact the company's profitability[79]. - Economic recessions could result in declines in average daily room rates, occupancy, and RevPAR, adversely affecting operational results[135]. - Inflation has negatively impacted operating expenses, including labor and utility costs, affecting overall profitability[125]. Regulatory and Compliance Issues - The company is subject to various governmental regulations that can materially impact capital expenditures and earnings[60]. - The company believes it is in substantial compliance with the Americans with Disabilities Act (ADA), but ongoing assessments and modifications may impact financial condition and distributions to stockholders[154]. - Environmental regulations may impose significant costs for compliance and cleanup, affecting financial condition and operational results[149]. - Climate change regulations may necessitate capital investments in energy efficiency and sustainable practices, impacting operational costs[153]. Cybersecurity and Operational Risks - Cybersecurity incidents pose risks to operations and could result in significant costs and reputational damage[106]. - The company engages a managed services provider for cybersecurity, which includes a virtual chief information security officer (vCISO) and a virtual chief information officer (vCIO)[202]. - The Audit Committee oversees the company's cybersecurity program and receives quarterly updates on incidents and developments[203]. - The company has implemented a cyber risk management program for third-party property managers to assess their cybersecurity maturity[200]. - The company faces various cybersecurity risks but has not experienced material impacts on its business strategy or financial condition to date[201]. Labor and Employment Considerations - The company employed 34 full-time employees, with no part-time employees, and none are union members[61]. - The company prioritizes employee well-being to attract and retain talent, focusing on competitive pay, benefits, and a discrimination-free work environment[62]. - Labor union activities may increase operational costs and reduce profitability, impacting financial results[128]. - Labor shortages may slow growth and increase operational costs due to the need for higher wages to attract qualified employees[130]. - Local jurisdictions in the U.S. are considering legislation to increase minimum wage, which could significantly raise hotel operating costs[131]. Legal and Litigation Risks - The company may face litigation that could materially impact its financial condition and results of operations[186]. - The company anticipates that the aggregate liabilities from ongoing legal proceedings will not materially impact its financial condition or results of operations[222]. Debt and Financial Obligations - Approximately $575.0 million of unhedged variable rate debt as of December 31, 2024, exposing the company to interest rate fluctuations[125]. - Existing debt agreements contain financial covenants that may limit operational flexibility and distributions to stockholders[137]. - Future debt service obligations may require liquidation of properties and jeopardize the ability to maintain REIT tax status[144]. - Increased interest rates could elevate interest expenses and reduce cash available for distributions to stockholders[146]. - Property tax increases due to rate changes or reassessments could negatively impact cash flow and financial condition[168]. Management and Franchise Agreements - The company has hotel management agreements that generally renew automatically for negotiated consecutive periods upon expiration unless the manager opts not to renew[208]. - The franchise agreements for 20 franchised hotels include fees of 5% to 7% of gross room sales, with some agreements also including a percentage of food and beverage sales[215][216]. - The company faces risks associated with maintaining franchise licenses, including potential termination and associated costs[114]. - The company has a cap on total management fees at 3.5% of total operating revenue, ensuring a limit on management costs relative to revenue[212]. Shareholder Considerations - The company has issued 4,760,000 shares of Series A Preferred Stock with an aggregate liquidation preference of approximately $119.0 million and annual dividends of about $9.8 million[191]. - The company intends to pay quarterly dividends representing at least 90% of its REIT taxable income, but future distributions may be adversely affected by various risks and uncertainties[182]. - The market price of the company's common stock and Series A Preferred Stock may decline due to increased market interest rates, which could make the returns on investment less attractive[185]. - Future issuances of common stock or Series A Preferred Stock may depress the market price and dilute existing stockholders' equity interests[189]. - The company has the authority to issue up to 400,000,000 shares of common stock and 10,000,000 shares of preferred stock, which could delay or prevent a change in control[174].