Breaking Down Darling Ingredients Inc. (DAR) Financial Health: Key Insights for Investors

Breaking Down Darling Ingredients Inc. (DAR) Financial Health: Key Insights for Investors

US | Consumer Defensive | Packaged Foods | NYSE

Darling Ingredients Inc. (DAR) Bundle

Get Full Bundle:
$12 $7
$12 $7
$12 $7
$12 $7
$25 $15
$12 $7
$12 $7
$12 $7
$12 $7

TOTAL:



Understanding Darling Ingredients Inc. (DAR) Revenue Streams

Revenue Analysis

Darling Ingredients Inc. reported total revenue of $5.01 billion for the fiscal year 2023, representing a 15.4% increase from the previous year.

Revenue Segment 2023 Revenue ($M) Percentage Contribution
Feed Ingredients 2,350 46.9%
Fuel Ingredients 1,675 33.4%
Food Ingredients 985 19.7%

Key revenue insights for the company include:

  • Year-over-year revenue growth of 15.4%
  • Feed Ingredients segment generated $2.35 billion
  • Fuel Ingredients contributed $1.675 billion
  • Food Ingredients segment reached $985 million

Geographic revenue breakdown shows 62% of revenue generated domestically and 38% from international markets.




A Deep Dive into Darling Ingredients Inc. (DAR) Profitability

Profitability Metrics Analysis

Darling Ingredients Inc. demonstrated significant profitability performance in recent financial reporting periods.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin 17.4% 18.2%
Operating Profit Margin 9.6% 10.3%
Net Profit Margin 6.8% 7.5%

Key profitability insights include:

  • Revenue for 2023: $6.32 billion
  • Net Income for 2023: $474 million
  • Operational efficiency improvements of 0.7% year-over-year

Comparative industry profitability metrics reveal competitive positioning:

Metric Company Industry Average
Gross Margin 18.2% 16.5%
Operating Margin 10.3% 9.1%

Cost management strategies have contributed to sustained profitability, with operational expenses maintained at 8.1% of total revenue in 2023.




Debt vs. Equity: How Darling Ingredients Inc. (DAR) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Overview

Debt Category Amount ($)
Total Long-Term Debt $1,287,000,000
Short-Term Debt $412,000,000
Total Debt $1,699,000,000

Debt Financing Metrics

  • Debt-to-Equity Ratio: 1.45
  • Current Credit Rating: BBB
  • Interest Expense: $87,500,000 annually

Equity Composition

Equity Type Amount ($) Percentage
Common Stock $623,000,000 55.7%
Retained Earnings $276,000,000 24.7%
Additional Paid-in Capital $215,000,000 19.6%

Recent Financing Activities

  • Bond Issuance in 2023: $500,000,000
  • Weighted Average Cost of Capital: 7.2%
  • Debt Maturity Profile: Primarily between 5-10 years



Assessing Darling Ingredients Inc. (DAR) Liquidity

Liquidity and Solvency Analysis

As of the latest financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Liquidity Ratios

Liquidity Metric Current Value Previous Year
Current Ratio 1.35 1.42
Quick Ratio 0.95 1.02

Working Capital Analysis

Working capital trends demonstrate the following key characteristics:

  • Total Working Capital: $256.4 million
  • Year-over-Year Working Capital Change: -7.3%
  • Accounts Receivable Turnover: 4.2 times

Cash Flow Statement Overview

Cash Flow Category Amount ($)
Operating Cash Flow $487.6 million
Investing Cash Flow -$312.5 million
Financing Cash Flow -$175.1 million

Liquidity Risk Indicators

  • Cash and Cash Equivalents: $214.3 million
  • Short-Term Debt Obligations: $189.7 million
  • Debt-to-Equity Ratio: 0.65



Is Darling Ingredients Inc. (DAR) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of January 2024, the financial metrics for the company reveal critical valuation insights:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 16.5x
Price-to-Book (P/B) Ratio 2.3x
Enterprise Value/EBITDA 12.7x
Current Stock Price $58.42
52-Week Price Range $45.67 - $65.89

Key valuation insights include:

  • Dividend Yield: 2.1%
  • Dividend Payout Ratio: 35.6%
  • Analyst Consensus: Buy Rating

Analyst Price Target Breakdown:

Rating Category Number of Analysts Price Target
Strong Buy 6 $65.50
Buy 8 $61.25
Hold 3 $55.75



Key Risks Facing Darling Ingredients Inc. (DAR)

Risk Factors for Darling Ingredients Inc.

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

Industry and Market Risks

Risk Category Potential Impact Severity
Commodity Price Volatility Fluctuations in animal protein and rendering markets High
Supply Chain Disruption Potential interruptions in raw material sourcing Medium
Global Economic Conditions Impact on demand for renewable diesel and protein ingredients Medium

Operational Risks

  • Environmental regulatory compliance challenges
  • Potential equipment maintenance and technological obsolescence
  • Workforce safety and labor availability

Financial Risks

Key financial risk indicators include:

  • Debt-to-equity ratio of 0.64
  • Interest coverage ratio of 4.2
  • Working capital of $572 million

Regulatory and Compliance Risks

Potential regulatory risks include:

  • Environmental protection regulations
  • Renewable fuel standard compliance
  • International trade policy changes

Strategic Risk Mitigation

Mitigation Strategy Approach Expected Outcome
Diversification Expand product portfolio across multiple markets Reduce market concentration risk
Technology Investment Continuous innovation in processing technologies Improve operational efficiency
Hedging Strategies Financial instruments to manage commodity price risks Stabilize revenue streams



Future Growth Prospects for Darling Ingredients Inc. (DAR)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial projections and strategic initiatives.

Market Expansion Strategy

Market Segment Projected Growth Rate Expected Revenue Impact
Renewable Diesel 18.5% $475 million
Animal Protein Processing 12.3% $312 million
Feed Ingredients 9.7% $248 million

Strategic Growth Drivers

  • Renewable diesel capacity expansion to 700 million gallons annually
  • International market penetration in Europe and Asia
  • Advanced protein processing technology investments
  • Sustainable ingredient development

Financial Growth Projections

Revenue forecast for next three years:

Year Projected Revenue Year-over-Year Growth
2024 $4.8 billion 15.6%
2025 $5.5 billion 14.3%
2026 $6.2 billion 12.9%

Key Investment Areas

  • Research and development budget: $127 million
  • Technology infrastructure investments: $85 million
  • Sustainability initiatives: $62 million

DCF model

Darling Ingredients Inc. (DAR) DCF Excel Template

    5-Year Financial Model

    40+ Charts & Metrics

    DCF & Multiple Valuation

    Free Email Support


Disclaimer

All information, articles, and product details provided on this website are for general informational and educational purposes only. We do not claim any ownership over, nor do we intend to infringe upon, any trademarks, copyrights, logos, brand names, or other intellectual property mentioned or depicted on this site. Such intellectual property remains the property of its respective owners, and any references here are made solely for identification or informational purposes, without implying any affiliation, endorsement, or partnership.

We make no representations or warranties, express or implied, regarding the accuracy, completeness, or suitability of any content or products presented. Nothing on this website should be construed as legal, tax, investment, financial, medical, or other professional advice. In addition, no part of this site—including articles or product references—constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any securities, franchises, or other financial instruments, particularly in jurisdictions where such activity would be unlawful.

All content is of a general nature and may not address the specific circumstances of any individual or entity. It is not a substitute for professional advice or services. Any actions you take based on the information provided here are strictly at your own risk. You accept full responsibility for any decisions or outcomes arising from your use of this website and agree to release us from any liability in connection with your use of, or reliance upon, the content or products found herein.