DiamondRock Hospitality Company (DRH) Soars to 52-Week High, Time to Cash Out?

Have you been paying attention to shares of DiamondRock Hospitality (DRH)? Shares have been on the move with the stock up 0.1% over the past month. The stock hit a new 52-week high of $9.44 in the previous session. DiamondRock Hospitality has gained 3.2% since the start of the year compared to the 19.1% gain for the Zacks Finance sector and the 4.5% return for the Zacks REIT and Equity Trust - Other industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on November 6, 2025, DiamondRock Hospitality reported EPS of $0.1 versus consensus estimate of $0.25 while it beat the consensus revenue estimate by 0.72%.For the current fiscal year, DiamondRock Hospitality is expected to post earnings of $1.08 per share on $1.12 in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $1.13 per share on $1.15 in revenues. This represents a year-over-year change of 3.43% and 2.16%, respectively.Valuation MetricsWhile DiamondRock Hospitality has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.DiamondRock Hospitality has a Value Score of A. The stock's Growth and Momentum Scores are D and B, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 8.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 11.3X. On a trailing cash flow basis, the stock currently trades at 11.8X versus its peer group's average of 11.2X. Additionally, the stock has a PEG ratio of 4.45. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making DiamondRock Hospitality an interesting choice for value investors.Zacks RankWe also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, DiamondRock Hospitality currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DiamondRock Hospitality passes the test. Thus, it seems as though DiamondRock Hospitality shares could still be poised for more gains ahead.How Does DRH Stack Up to the Competition?Shares of DRH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is CTO Realty Growth, Inc. (CTO). CTO has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of B.Earnings were strong last quarter. CTO Realty Growth, Inc. beat our consensus estimate by 2.04%, and for the current fiscal year, CTO is expected to post earnings of $2.18 per share on revenue of $150.85 million.Shares of CTO Realty Growth, Inc. have gained 2.3% over the past month, and currently trade at a forward P/E of 8.34X and a P/CF of 8.52X.The REIT and Equity Trust - Other industry is in the top 42% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DRH and CTO, even beyond their own solid fundamental situation.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report DiamondRock Hospitality Company (DRH): Free Stock Analysis Report CTO Realty Growth, Inc. (CTO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks