Diamondrock Hospitality Co (DRH) is undervalued and Pebblebrook Hotel Trust (PEB) is overvalued.
Against our estimates of intrinsic value, DRH trades at the wider discount: a margin of safety of +37%, against -70% for PEB.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 8.6% (average of 3 methods) values the shares at $19.53; the price of $12.31 is 37% below that value, and 79% of that value comes from beyond year five.
Leak Score 54/100 on 3 of 12 signals
Discounting its cash flows at 8.1% values the shares at $10.71; the price of $18.26 is 70% above that value, and 80% of that value comes from beyond year five.
Leak Score 0/100 on 2 of 12 signals
| Metric | DRH | PEB |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $12.31 | $18.26 |
| Intrinsic value | $19.53 | $10.71 |
| Margin of safety | +37% | -70% |
| Leak Score | 54/100 (3/12) | 0/100 (2/12) |
| Market cap | $2.5B | $2.1B |
| Revenue growth, 5 years | 30.2% | 27.2% |
| Operating margin | 16.3% | 7.4% |
| Net margin | 13.1% | -5.3% |
| Return on equity | 9.9% | -1.8% |
| Debt to equity | 0.79 | 1.02 |
| P/E | 17.1x | — |
| Forward P/E | 18.5x | — |
| P/B | 1.6x | 0.8x |
| Dividend yield | 3.3% | 0.2% |