Darling Ingredients (DAR): $32.4M One-Off Loss Drives Margin Miss, Challenges Turnaround Narratives

Darling Ingredients (DAR) reported net profit margins of 1.8%, down sharply from 4.4% in the previous year, with the latest 12 months heavily affected by a one-off $32.4 million loss. Earnings have declined by 13% on an annual basis over the last five years, while negative earnings growth has marked the past year. Despite this run of disappointing performance, the share price sits at $34.55, notably below the estimated fair value of $71.34, and consensus now expects a significant 44.7% annual earnings growth over the next three years.

See our full analysis for Darling Ingredients.

The next step is to see how these latest results compare to the big narratives being discussed. Some market views may be confirmed, while others could get called into question.

See what the community is saying about Darling Ingredients

Margin Recovery Hopes Offset Tough Recent Performance

• Net profit margins have fallen to 1.8%, dragged down by a $32.4 million one-off loss. Analysts forecast margin expansion to 10.4% within three years, which would mark a major turnaround from current levels.
• The analysts' consensus view expects that margin improvement will be supported by regulatory tailwinds and higher demand for renewable diesel, particularly as stricter greenhouse gas rules and potential increases in credit prices are implemented.
  • Consensus narrative notes regulatory shifts and policy support are likely to boost margins in the Feed and Fuel segments through at least 2026.
  • However, unresolved policy issues and rising costs remain real risks that could delay or limit the margin rebound.

Revenue Grows, but Lags Behind Industry Pace

• Revenue growth for Darling Ingredients is forecast at 3.7% per year, well below the 10% annual growth expected for the broader US market, highlighting competitive pressure on the top line.
• The analysts' consensus view suggests that while product and regional diversification should help stabilize revenues, high input costs and weak growth in the Food segment could act as ongoing drags.
  • Analysts flag ongoing expansion into specialty ingredients as a driver of future growth, even as legacy segments face slower momentum.
  • Bears argue that rising feedstock and raw material costs threaten near-term revenue gains.

Valuation: Price Trails Both Analyst Targets and DCF Fair Value

• With shares at $34.55, Darling Ingredients currently trades about 24.7% below the analyst price target of $45.85 and at less than half of its DCF fair value of $71.34. This raises the question of whether the market is too pessimistic or analysts are overly optimistic.
• The analysts' consensus view frames this valuation gap as both an opportunity and a warning. Potential upside rests on ambitious assumptions about earnings and margin recovery, while downside risks stem from high current valuation multiples and sector-specific headwinds.
  • Profit margin and earnings forecasts would require Darling to deliver sustained improvement, even as cyclical and regulatory risks persist.
  • The wide range of analyst price targets underscores debate about what a fair valuation for the company should be given historical volatility and future uncertainty.

Curious whether Darling’s turnaround story stacks up against market expectations? Dive into the full consensus narrative for a deeper breakdown. 📊 Read the full Darling Ingredients Consensus Narrative.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Darling Ingredients on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Not convinced by the figures? Share your angle and build your own narrative in just a few minutes: Do it your way

A great starting point for your Darling Ingredients research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

See What Else Is Out There

Darling Ingredients faces pressure from shrinking margins, weak revenue growth compared to peers, and a heavy reliance on a major turnaround for future gains.

If you want stocks that confidently deliver consistent results through cycles, check out stable growth stocks screener (2098 results) for companies already showing steady revenue and earnings growth. There is no waiting required.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com