MeritValue

DiamondRock Hospitality Co

DRHdata completeness 100%18 fiscal years on file
The thesis, from the filings

DiamondRock Hospitality Co earns about 2% on invested capital, below its ~9% cost of capital, with a roughly flat share count — no moat visible in the numbers. The estimate methods put fair value between $4.3 and $10.02 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$567.1M1$1B2$1.07B3$1.13B3$1.12B3
Net income−$194.6M4$109.3M5$86.3M6$48M6$101.4M6
Operating cash flow−$2.31M7$206.2M8$237.6M9$224.4M9$243.7M9
Capital expenditure—$67.7M10$86.3M11$81.6M11$81.6M11
Free cash flow (derived)—$138.6M8$151.3M9$142.8M9$162.1M9
Total debt$1.07B12$1.19B13$1.18B14$1.1B15$1.1B15
Cash & equivalents$38.6M16$67.6M17$121.6M18$81.4M18$68.1M18
Diluted shares212.1M213.2M212.3M211.2M208.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$69.52
your share of equity
Profit it earned you last year
$4.87
Free cash flow it threw off
$7.78
Debt you’d be carrying
$52.76

10 shares is a claim on $69.52 of net worth that earned you $4.87 and generated $7.78 of cash last year, against $52.76 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
2% avg · 5y
FY21 -5%FY22 5%FY23 6%FY24 2%FY25 4%

It earned about 2% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
−2% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $4.3 and $10.02 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$10.02
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.9%
  • fcfBase$151.3M
DCF · Growth Exit 5Y
$8.44
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.9%
  • fcfBase$151.3M
Earnings Power Value
$4.3
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$86.3M
  • growthAssumed0.0%
Graham Number
$8.3
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.9%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $8.44
The three cases
Bear0.0%$5.43
Base5.9%$8.44
Bull10.9%$11.54

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.9%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001298946-24-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001298946-25-000015 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001298946-26-000013 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001298946-24-000011 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001298946-25-000015 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001298946-26-000013 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001298946-24-000011 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001298946-25-000015 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001298946-26-000013 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-12-31 · accession 0001298946-25-000015 (PaymentsForCapitalImprovements)
  11. 10-K · period ending 2023-12-31 · accession 0001298946-26-000013 (PaymentsForCapitalImprovements)
  12. 10-K · period ending 2021-12-31 · accession 0001298946-23-000015 (LongTermDebt)
  13. 10-K · period ending 2022-12-31 · accession 0001298946-24-000011 (LongTermDebt)
  14. 10-K · period ending 2023-12-31 · accession 0001298946-25-000015 (LongTermDebt)
  15. 10-K · period ending 2024-12-31 · accession 0001298946-26-000013 (LongTermDebt)
  16. 10-K · period ending 2021-12-31 · accession 0001298946-23-000015 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-12-31 · accession 0001298946-25-000015 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-31 · accession 0001298946-26-000013 (CashAndCashEquivalentsAtCarryingValue)