Value
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.4 |
| P/S | 9.3 |
| EV/EBITDA | 4.2 |
| Fwd P/E | 9.2 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 10.8x
- ▸PEG: 0.04
- ▸Attractively valued
DAR · Why this verdict
Why Darling Ingredients (DAR) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Two consecutive large earnings beats — including a 113% positive surprise in February 2026 — and 18.5% upside to analyst consensus with a 3.0-to-1 risk/reward create a recovery thesis worth monitoring, but negative price momentum, an elevated put/call ratio signaling bearish hedging, and 65% revenue concentration in a single segment have kept buyers sidelined.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Momentum scores 3.4 out of 10 — well below the minimum passing threshold — with volume in distribution (falling OBV) and no clear chart pattern, indicating institutional buyers have not yet acted on the earnings improvement despite an oversold RSI of 35. Momentum | OBV reverses to a rising trend and momentum score improves above 4.5, signaling institutional buyers are beginning to position ahead of the next catalyst. | ↑Improving |
| CounterAn RSI of 35 in an uptrend pullback context often precedes a mean-reversion bounce; the combination of oversold conditions and a strong fundamental backdrop from recent earnings could quickly shift the momentum picture. | ||
The two most recent quarters produced outsized positive surprises of 113% and 41%, reversing a prior period of weakness — a pattern suggesting the earnings cycle has turned and management is now guiding conservatively relative to what the business can deliver. Earnings | EPS beats a third consecutive quarter with positive surprise above 20%, confirming the recent acceleration is durable and not a one-time catch-up. | ↓Deteriorating |
| CounterThe two prior quarters produced a 29% miss and a near-in-line result, showing the business struggled before the recent inflection; two beats does not yet establish whether the acceleration is structural or a temporary catch-up. | ||
A forward P/E of 11.3 times with a PEG ratio near zero and 18.5% upside to the $66.48 analyst consensus target, backed by a risk/reward ratio of roughly 3.0-to-1, positions the stock as attractively valued relative to the growth trajectory the recent earnings acceleration implies. Value | The stock closes within 5% of the $66.48 consensus target within 12 months as the earnings recovery narrative gains recognition. | ↓Deteriorating |
| CounterThe low PEG is valid only if the earnings acceleration is sustained; if the two strong beats were catch-up rather than a new run rate, the apparent cheapness evaporates quickly. | ||
A put/call ratio of 3.54 — flagged as elevated — indicates the options market is expressing a substantially more cautious view than the recent earnings data alone would suggest, with put buyers outnumbering call buyers by more than 3-to-1. Risk | If this pillar is wrong, the put/call ratio falls below 2.0 as bearish hedges are unwound following positive fundamental developments. | ↑Improving |
| CounterAn elevated put/call ratio can reflect institutional hedging of an existing long position rather than net directional bearishness; heavy put positioning can also precede sharp short-covering rallies. | ||
Feed Ingredients account for 65% of revenue — a high-severity concentration flagged in the company's own risk disclosures — meaning the economics of a single commodity-exposed segment drive the majority of the business outcome. Bear case | If this pillar is wrong, non-Feed-Ingredients segments grow faster and reduce the Feed Ingredients revenue share below 55% of total revenue within 12 months. | ↑Improving |
| CounterA dominant segment with 65% share is not inherently problematic if that segment has stable or growing demand; concentration becomes a risk only when the primary segment faces structural headwinds. | ||
Momentum scores 3.4 out of 10 — well below the minimum passing threshold — with volume in distribution (falling OBV) and no clear chart pattern, indicating institutional buyers have not yet acted on the earnings improvement despite an oversold RSI of 35.
↑ImprovingMomentum
- Expectation
- OBV reverses to a rising trend and momentum score improves above 4.5, signaling institutional buyers are beginning to position ahead of the next catalyst.
CounterAn RSI of 35 in an uptrend pullback context often precedes a mean-reversion bounce; the combination of oversold conditions and a strong fundamental backdrop from recent earnings could quickly shift the momentum picture.
The two most recent quarters produced outsized positive surprises of 113% and 41%, reversing a prior period of weakness — a pattern suggesting the earnings cycle has turned and management is now guiding conservatively relative to what the business can deliver.
↓DeterioratingEarnings
- Expectation
- EPS beats a third consecutive quarter with positive surprise above 20%, confirming the recent acceleration is durable and not a one-time catch-up.
CounterThe two prior quarters produced a 29% miss and a near-in-line result, showing the business struggled before the recent inflection; two beats does not yet establish whether the acceleration is structural or a temporary catch-up.
A forward P/E of 11.3 times with a PEG ratio near zero and 18.5% upside to the $66.48 analyst consensus target, backed by a risk/reward ratio of roughly 3.0-to-1, positions the stock as attractively valued relative to the growth trajectory the recent earnings acceleration implies.
↓DeterioratingValue
- Expectation
- The stock closes within 5% of the $66.48 consensus target within 12 months as the earnings recovery narrative gains recognition.
CounterThe low PEG is valid only if the earnings acceleration is sustained; if the two strong beats were catch-up rather than a new run rate, the apparent cheapness evaporates quickly.
A put/call ratio of 3.54 — flagged as elevated — indicates the options market is expressing a substantially more cautious view than the recent earnings data alone would suggest, with put buyers outnumbering call buyers by more than 3-to-1.
↑ImprovingRisk
- Expectation
- If this pillar is wrong, the put/call ratio falls below 2.0 as bearish hedges are unwound following positive fundamental developments.
CounterAn elevated put/call ratio can reflect institutional hedging of an existing long position rather than net directional bearishness; heavy put positioning can also precede sharp short-covering rallies.
Feed Ingredients account for 65% of revenue — a high-severity concentration flagged in the company's own risk disclosures — meaning the economics of a single commodity-exposed segment drive the majority of the business outcome.
↑ImprovingBear case
- Expectation
- If this pillar is wrong, non-Feed-Ingredients segments grow faster and reduce the Feed Ingredients revenue share below 55% of total revenue within 12 months.
CounterA dominant segment with 65% share is not inherently problematic if that segment has stable or growing demand; concentration becomes a risk only when the primary segment faces structural headwinds.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.0 |
| ROA | 2.4 |
| Gross margin | 1.3 |
| Op margin | 5.2 |
| Net margin | 4.6 |
| Current ratio | 5.7 |
| FCF quality | 2.9 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 37% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.6 |
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 8.4 |
| Price target | 7.5 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider buying — $60,970 (0.001% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 6.9 |
| growth rank | 7.7 |
- ▸Best-in-class margins
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.6 |
| 52w position | 9.8 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 7.9 |
| volatility | 3.6 |
| put call | 10.0 |
| implied vol | 6.0 |
| beta | 6.9 |
| debt equity | 6.3 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (7)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:76d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.2<1.5@spot
Warning (0)
none
Reward-to-Risk
0.22
Upside
+3.1%
Downside
13.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 65, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:7.4>=5.5. Top dim: Value at 7.6; weakest: Technical at 3.5. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Value at 7.6, Sentiment at 7.5, and Momentum at 7.4; the weakest are Technical at 3.5, Quality at 4.6, and Peer rank at 5.5. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.22 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Acceleration Two Beat Run
Trip ifEPS surprise falls below 0% in either of the next 2 consecutive quarters.
- P2Attractive Valuation Favorable Asymmetry
Trip ifForward EPS estimate is cut by more than 20% in a single revision cycle.
- P3Elevated Bearish Options Positioning
Trip ifPut/call ratio falls below 2.0 and stays below that level for 4 consecutive weeks.
- P4Product Concentration Feed Ingredients
Trip ifFeed Ingredients revenue share falls below 55% of total company revenue over any trailing 12-month period.
- P5Negative Momentum Buyers Sidelined
Trip ifOBV reverses to a rising trend and momentum score rises above 4.5 within 3 months.