Darden Restaurants Recent Insider Activity

Martin Melvin John, President at Darden Restaurants DRI, reported an insider sell on October 8, according to a new SEC filing.

What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday outlined that John executed a sale of 3,000 shares of Darden Restaurants with a total value of $489,894.

As of Wednesday morning, Darden Restaurants shares are down by 0.85%, currently priced at $157.78.

Discovering Darden Restaurants: A Closer Look

Darden Restaurants is the largest restaurant operator in the us full-service space, with consolidated revenue of $11.4 billion in fiscal 2024 resulting in 3%-4% full-service market share (per NRA data and our calculations). The company maintains a portfolio of 10 restaurant brands: Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Ruth's Chris, Yard House, The Capital Grille, Seasons 52, Eddie V's, Bahama Breeze, and The Capital Burger. Darden generates revenue almost exclusively from company-owned restaurants, though a small network of franchised restaurants and consumer-packaged goods sales through the traditional grocery channel contribute modestly. As of the end of its fiscal 2024, the company operated 2,031 restaurants in the us.

Darden Restaurants's Economic Impact: An Analysis

Revenue Growth: Darden Restaurants's remarkable performance in 3 months is evident. As of 31 August, 2024, the company achieved an impressive revenue growth rate of 0.97%. This signifies a substantial increase in the company's top-line earnings. When compared to others in the Consumer Discretionary sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Evaluating Earnings Performance:

• Gross Margin: The company faces challenges with a low gross margin of 20.41%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): Darden Restaurants's EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 1.75.

Debt Management: Darden Restaurants's debt-to-equity ratio is below the industry average. With a ratio of 2.48, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The Price to Earnings ratio of 18.35 is lower than the industry average, indicating potential undervaluation for the stock.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.67, the stock presents an attractive valuation, potentially signaling a buying opportunity for investors interested in sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Darden Restaurants's EV/EBITDA ratio at 13.2 suggests potential undervaluation, falling below industry averages.

Market Capitalization: Surpassing industry standards, the company's market capitalization asserts its dominance in terms of size, suggesting a robust market position.

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The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Navigating the World of Insider Transaction Codes

Navigating through the landscape of transactions, investors often prioritize those unfolding in the open market, precisely detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Darden Restaurants's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.