DCF Tool

DRH

Diamondrock Hospitality Co. – Other Financial Vehicles
DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 31 premium quality hotels with over 10,000 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families such as Hilton and Marriott as well as unique boutique hotels in the lifestyle segment.
Analysis Results
Intrinsic Value $3.19
Latest Price $9.96
Relative Value 213% overvalued
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Cash Flow (Millions)
Analysis Parameters
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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 -6.3%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -6.3%, 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)
2022 60.9 56.1
2023 57.0 48.5
2024 53.4 41.9
2025 50.1 36.2
2026 46.9 31.3
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 744 million. This corresponds to a present value of 458 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 214 million. Adding in the terminal value gives a total present value of 672 million.

There are presently 211.0 million outstanding shares, so the intrinsic value per share is 3.19.

Financial Statements

The following data was to determine the past cash flows.

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

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