DRH Intrinsic Value

DRH

Diamondrock Hospitality Co. – Other Financial Vehicles

diamondrock, a lodging-focused maryland corp. operates as a real estate investment trust (reit), owns a portfolio of 26 premium hotels & resorts containing ~9,500 rooms, concentrated in key gateway cities and destination resorts throughout north america and the u.s.v.i. our vision is to be the premier allocator of capital in the lodging industry and our goal is to deliver above-average shareholder returns across the full lodging cycle. we strive to differentiate ourselves from peers by executing on three strategic principles: - maintaining a balanced portfolio of high-quality assets with superior growth prospects in markets that have high barriers to entry. - employing disciplined and innovative approaches to asset management that drive meaningful upside to underlying performance. - preserving a clean, conservative balance sheet that supports strategic and financial flexibility, dividends and shareholder returns. as an owner, as opposed to an operator, we receive all operating profits

Analysis Results

Intrinsic Value	$4.60
Latest Price	$7.77
Relative Value	69% overvalued

Share results:

Thoughts on this result? Let us know.

Cash Flow (Millions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -3.8%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -3.8%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (million)	Present value (million)
2023	74.4	68.9
2024	71.5	61.4
2025	68.8	54.7
2026	66.2	48.7
2027	63.6	43.4

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 1090 million. This corresponds to a present value of 688 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 277 million. Adding in the terminal value gives a total present value of 965 million.

There are presently 210.0 million outstanding shares, so the intrinsic value per share is 4.6.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	320,403,000
Current Cash	67,564,000
Current Liabilities	188,528,000
Current Debt	0
Non-Cash Working Capital (NCWC)	64,311,000
Change in NCWC	71,102,000
EBIT	164,109,000
Tax Provision	2,607,000
Depreciation and Amortization	109,069,000
Capital Expenditure	-249,599,000
Unlevered Free Cash Flow	90,871,681

Current Assets	176,763,000
Current Cash	38,620,000
Current Liabilities	144,934,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-6,791,000
Change in NCWC	48,347,000
EBIT	-30,050,000
Tax Provision	3,267,000
Depreciation and Amortization	103,189,000
Capital Expenditure	-47,132,000
Unlevered Free Cash Flow	74,354,000

Current Assets	209,694,000
Current Cash	111,796,000
Current Liabilities	153,036,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-55,138,000
Change in NCWC	15,348,000
EBIT	-196,963,000
Tax Provision	-26,452,000
Depreciation and Amortization	114,949,000
Capital Expenditure	-88,051,000
Unlevered Free Cash Flow	-154,717,000

Current Assets	243,584,000
Current Cash	122,524,000
Current Liabilities	191,546,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-70,486,000
Change in NCWC	-5,755,000
EBIT	100,985,000
Tax Provision	22,028,000
Depreciation and Amortization	118,339,000
Capital Expenditure	-199,259,000
Unlevered Free Cash Flow	3,523,981

Current Assets	141,283,000
Current Cash	43,863,000
Current Liabilities	162,151,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-64,731,000
Change in NCWC	-50,767,000
EBIT	108,958,000
Tax Provision	3,101,000
Depreciation and Amortization	104,740,000
Capital Expenditure	-115,171,000
Unlevered Free Cash Flow	44,042,839

Current Assets	341,678,000
Current Cash	183,569,000
Current Liabilities	172,073,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-13,964,000
Change in NCWC	29,408,000
EBIT	138,941,000
Tax Provision	10,207,000
Depreciation and Amortization	99,185,000
Capital Expenditure	-99,551,000
Unlevered Free Cash Flow	154,090,805

Current Assets	358,705,000
Current Cash	243,095,000
Current Liabilities	158,982,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-43,372,000
Change in NCWC	67,351,000
EBIT	157,470,000
Tax Provision	12,399,000
Depreciation and Amortization	97,510,000
Capital Expenditure	-102,861,000
Unlevered Free Cash Flow	204,119,785

Current Assets	346,360,000
Current Cash	213,584,000
Current Liabilities	243,499,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-110,723,000
Change in NCWC	-28,475,000
EBIT	155,735,000
Tax Provision	11,575,000
Depreciation and Amortization	101,223,000
Capital Expenditure	-62,950,000
Unlevered Free Cash Flow	146,988,350

Current Assets	276,931,000
Current Cash	144,365,000
Current Liabilities	214,814,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-82,248,000
Change in NCWC	-84,032,000
EBIT	124,643,000
Tax Provision	5,636,000
Depreciation and Amortization	99,755,000
Capital Expenditure	-62,571,000
Unlevered Free Cash Flow	73,638,586

Current Assets	343,495,000
Current Cash	144,584,000
Current Liabilities	197,127,000
Current Debt	0
Non-Cash Working Capital (NCWC)	1,784,000
Change in NCWC	-14,199,000
EBIT	78,758,000
Tax Provision	-16,000
Depreciation and Amortization	105,754,000
Capital Expenditure	-107,307,000
Unlevered Free Cash Flow	63,006,000

Current Assets	205,761,000
Current Cash	9,623,000
Current Liabilities	180,155,000
Current Debt	0
Non-Cash Working Capital (NCWC)	15,983,000
Change in NCWC	12,393,000
EBIT	69,033,000
Tax Provision	-6,046,000
Depreciation and Amortization	101,593,000
Capital Expenditure	-49,262,000
Unlevered Free Cash Flow	133,757,000

This analysis is provided for informational purposes only and does not constitute financial or investing advice. For more information on the advantages and limitations of DCF analysis see background. This information is provided on an "as is" basis. No warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. By using this site you agree that under no circumstances shall Valuation Tools LLC be held liable for any loss or damage caused by information obtained from this website including any articles, data, videos, its social media accounts, or any other materials.