Darden Restaurants Inc (DRI) stock analysis
Darden Restaurants Inc (DRI) clears 2 of this site's 8 mechanical value filters, 5 of 8 Buffett-style checks and 3 of 5 Lynch-style checks. At $217.56 it trades 39.4% above this site's neutral DCF value (a margin of safety of -39.4%). Its earnings quality rates Strong and it returns +5.3% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Darden Restaurants do?
Darden Restaurants owns and operates full-service restaurant chains, led by Olive Garden and LongHorn Steakhouse.
Brands and businesses it owns
- Olive Garden
- LongHorn Steakhouse
- Cheddar's Scratch Kitchen
- Yard House
- Ruth's Chris Steak House
- The Capital Grille
- Seasons 52
- Chuy's
What stands out about Darden Restaurants?
- The share price implies 16.4% yearly growth. At $217.56, DRI's free cash flow of $9.14 per share would have to grow 16.4% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- Misses 4 of the 8 value filters. It fails Market Cap > $25B ($24.3B), PEG Ratio < 1.5 (2.28) and Price/Book < 8 (11.75) and 1 more; the other 2 pass and 2 were not evaluated. See every filter.
- The margin of safety is falling. It went from -29% on Oct 7 to -39% on Oct 23 across 5 weekly readings. See the trend.
- Strongest against peers: dividend yield. At 2.89% (peer median 1.93%) it ranks 3rd of 13 among hotels, restaurants & leisure stocks this site tracks. See the ranking.
- Short interest is elevated. 6.0% of the float is sold short, 4.4 days to cover, above this site's 5% flag. See the figures.
How has Darden Restaurants' share price moved?
The interactive price chart needs JavaScript.
Is Darden Restaurants undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -39.4%
- P/E vs. its own history 20.6x · the middle Real range: 16.9x–24.1x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 3.91/5 33 analysts this month: 10 strong buy, 11 buy, 11 hold, 1 sell, 0 strong sell (Finnhub). Up from 3.88 last month.
- Earnings quality (is the profit real?) Strong · all 5 checks clean Beneish M-score −2.39 · accruals −5.1% of assets · 158% of profit arrived as cash · stock comp 0.6% of revenue · share count −1.9% a year. From the latest 10-K (year to May 2026) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) +5.3% net Latest fiscal year (2026): dividends 2.9% + buybacks 2.8% − stock comp 0.3%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 13%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $3.41 per $1 of new profit · Capital-hungry Operating profit $759M → $1.4B, capital needed $2.7B → $4.9B, 2017–2026 (3-year averages); return on capital now 29% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 2.28 · Well above fair P/E 20.6× ÷ 9.0% a year of growth behind it. 257th lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 2 of 4 · misses capital-light, price Capital-light growth: not cleared (profit grew 1.9×, under 2×); Profit is real: cleared; Cash to owners: cleared; Fair price (PEG): not cleared (PEG 2.28, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 2 flags
- Standing vs. sector peers 4 of 7 measures above the median Compared with the 17 other hotels, restaurants & leisure stocks this site tracks: 2 in the top third, 1 in the bottom third.
- Dividend payout sustainability 0/6 · clean
How does Darden Restaurants compare with its peers?
4 of 7 measures sit above the median of the 17 other hotels, restaurants & leisure stocks tracked here, 2 in the top third and 1 in the bottom third.
- P/E ratiolower is cheaper · peer median 18.2× 20.6× –12th of 18
- Free-cash-flow yieldhigher is cheaper · peer median 4.4% 4.2% –11th of 18
- Return on equityhigher is better · peer median 55% 56% –9th of 18
- Net marginhigher is better · peer median 11.7% 8.8% ✕13th of 18
- Revenue growthhigher is better, year on year · peer median 7.7% 8.1% –9th of 18
- Debt / equitylower is safer · peer median 5.84 2.12 ✓5th of 17
- Dividend yieldamong dividend payers · peer median 1.93% 2.89% ✓3rd of 13
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and DRI doesn't clear enough of it yet. In its favor: DRI is currently earning a strong return on shareholders' equity, and has kept that profitability up over five years, not just this year, has grown earnings per share at a solid clip over five years, earns many times its interest expense, so debt service isn't a worry, and trades at a reasonable multiple of owner earnings, his own term for the real cash a business could pay out. Where it comes up short: DRI carries more debt relative to equity than he typically tolerates, runs thinner pretax margins than he'd like to see, and is trading above what a conservative discounted-cash-flow estimate says it's worth right now.
- ROE (TTM) > 11% ✓
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✕
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✓
- Bonus: returning capital via buybacks FY2026
Lynch looked for growth stories that weren't overpriced for that growth, and DRI falls short of his bar. In its favor: DRI pays a real dividend, the actual reason he bought slow growers at all, is growing at the modest, GDP-ish pace typical of a slow grower, and converts earnings into real cash at a reasonable price. Where it comes up short: DRI carries more debt than he liked to see, even allowing for the extra room a large, stable business gets, and is priced too rich for how little growth is actually left in the business.
- Dividend yield > 2.5% ✓
- EPS growth 0%-10% ✓
- Debt/Equity < 0.6 ✕
- P/E < 20 ✕
- Price/FCF < 25 ✓
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Darden Restaurants pass?
- Market Cap > $25B $24.3B
- Trailing P/E < 25 20.56
- PEG Ratio < 1.5 2.28
- Price/Book < 8 11.75
- Price/Sales < 7 1.82
- EPS Growth YoY > -5% -6.9%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Darden Restaurants' margin of safety?
-29% on 2026-10-07 → -39% on 2026-10-23 (5 weekly readings).
Where is Darden Restaurants in its 52-week range?
What is the short interest in Darden Restaurants?
6,751,776 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Darden Restaurants? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case +18%
- Short interest under 5% of float 6.0%
- Passes most of the 6 fundamental filters 2/6 passed
- Price run-up backed by value, not just momentum +27% off 52wk low
- Debt/equity stable since 2017 0.45 → 0.74
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Darden Restaurants shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from DRI's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Darden Restaurants' 10-year financials show?
From DRI's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Darden Restaurants
What kind of company is Darden Restaurants?
Darden Restaurants owns and operates full-service restaurant chains, led by Olive Garden and LongHorn Steakhouse. Brands and businesses it owns include Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, Ruth's Chris Steak House and The Capital Grille. This site groups it with Hotels, Restaurants & Leisure stocks.
Is Darden Restaurants trading above or below its DCF value?
At $217.56, DRI trades 39.4% above this site's neutral DCF value of $156.12 per share, a margin of safety of −39.4%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Darden Restaurants pass?
DRI passes 2 of 8. It passes Trailing P/E < 25 (20.56) and Price/Sales < 7 (1.82). It misses Market Cap > $25B ($24.3B), PEG Ratio < 1.5 (2.28), Price/Book < 8 (11.75) and EPS Growth YoY > -5% (-6.9%). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
What growth is Darden Restaurants' share price pricing in?
At $217.56, DRI's free cash flow of $9.14 per share would have to grow 16.4% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
How much cash does Darden Restaurants return to shareholders?
DRI's net shareholder yield is +5.3%: the cash it returns through dividends and buybacks, minus stock-based compensation, as a share of its market value. Latest fiscal year (2026): dividends 2.9% + buybacks 2.8% − stock comp 0.3%, as a share of today's market cap. Over 14 years its split-adjusted share count fell 13%. Its trailing dividend yield is 2.89%, paid out of 67% of its free cash flow; the dividend-sustainability check raises 0 of 6 flags. See Shareholder Yield Leaders and the Sustainable Dividend Screener.
How heavily is Darden Restaurants stock sold short?
As of September 30, 2026, 6.0% of DRI's float was sold short (6,751,776 shares, 4.4 days to cover), up 10.4% from the prior reporting period. FINRA publishes short interest twice a month, so it changes about every two weeks; this site flags anything above 5% of the float.
Where do these numbers come from?
- Financial statements: Darden Restaurants's 10-K annual report for the year ended May 31, 2026, filed Jul 24, 2026 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Darden Restaurants Inc analysis
This page shows every value-investing check the site runs on Darden Restaurants Inc (DRI) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.