3 models fit Diamondrock Hospitality Company Common Stock and they disagree: 1 of 3 land within 15% of the average.
Two or more of our models back this value.
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Valued as a REIT (property company): Price to FFO, Dividend discount, and EV/EBITDA comparison.
ACCE opinionDiamondrock Hospitality Company Common Stock (DRH)
Fair value (3 models)
$11.69
ACCE price target
$13.00
Rating
Overvalued
Horizon
12 months
Fair value published on 21 Oct 2026, 12:04 CEST; previously $10.93 since 16 Oct 2026, 00:00 CEST.
ACCE price target published on 11 Oct 2026, 00:00 CEST.
Rating published on 21 Oct 2026, 12:04 CEST.
Price used: $13.76 at the close on 23 Oct 2026, 22:00 CEST.
Models: EV/EBITDA comparison, Dividend discount, and Price to FFO.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
17.8% above
-15.1% to fair value
ACCE score
73
out of 100
Analysts
50% buy
14 covering
P/E
19.1x
forward 21.8x
1-year return
+76.2%
Dividend yield
3.17%
Diamondrock Hospitality Company Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
DiamondRock Hospitality owns a portfolio of upper-upscale and luxury hotels in the US, operating under brands such as Marriott, Hilton and Hyatt, with a REIT structure that passes most taxable income to shareholders. Its edge is asset quality and a capital-light model, since the company owns the real estate and third-party operators run the properties under management contracts. Revenue is growing at 4.1%, with a 23.0% operating margin and a 9.9% return on equity, and the stock trades at 18.2 times trailing earnings and 19.8 times forward earnings, meaning the market is not pricing in a sharp earnings acceleration. The thesis rests on whether continued leisure and business travel demand at the high end can sustain rate and occupancy gains without a meaningful deterioration in margins. At a $2.7 billion market cap with no index membership, the name sits outside the largest pools of passive capital, which is worth weighing against the score of 74 when deciding whether it merits deeper work.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
moderate
Revenue growth slowing
Revenue grew only 4.1% year over year and fell 6.0% quarter over quarter, well below the 30.2% five-year revenue CAGR, so the recent trend has cooled sharply.
moderate
Price above model fair value
The stock trades 17.8% above the model fair value of $11.69, leaving less margin of safety if the earnings rebound stalls.
moderate
Elevated short interest
Short interest stands at 9.2% of the float, which signals some bearish conviction among professional sellers.
AI research notes
AI-assisted·How I use AIWritten Oct 19, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Free cash flow over the last twelve months reached $162M, and the stock yields 5.9% on that cash flow.
Diluted share count fell 1.4% last fiscal year, so each remaining share owns a slightly larger slice of the business.
The company beat earnings estimates by 18.9% in its latest report, with earnings per share of 0.44 against 0.37 expected.
Why it could disappoint
Return on invested capital is only 5.8%, which is thin for a company carrying debt equal to 0.82 of its equity.
The stock trades 17.8% above the model fair value of $11.69, and the three valuation models in the consensus all sit on that side of the price.
Revenue grew only 4.1% year over year, far below the 30.2% yearly average over five years, and forward earnings are expected to fall below trailing levels.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Nov 3, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
INVESTOR
Where DRH's valuation models land
Price
$13.76
Model fair value
$11.69
Model range
$9.75 to $13.90
Fair value $11.69
Price $13.76
The price sits inside the model range.
Model
Fair value
Upside
Dividend discount
EV/EBITDA comparison
Price to FFO
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
The full quality picture: a reason under every score, how the scores moved, and the conviction breakdown.
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+Conviction breakdown and growth / value / quality / momentum scores