MENSAH NANA, Director at Darden Restaurants DRI, executed a substantial insider sell on September 25, according to an SEC filing.

What Happened: NANA’s decision to sell 1,171 shares of Darden Restaurants was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday. The total value of the sale is $201,292.

In the Thursday’s morning session, Darden Restaurants‘s shares are currently trading at $168.87, experiencing a up of 0.45%.

All You Need to Know About Darden Restaurants

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.

A Deep Dive into Darden Restaurants’s Financials

Decline in Revenue: Over the 3 months period, Darden Restaurants faced challenges, resulting in a decline of approximately -6.77% in revenue growth as of 31 August, 2024. This signifies a reduction in the company’s top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Consumer Discretionary sector.

Holistic Profitability Examination:

• Gross Margin: With a low gross margin of 20.41%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): Darden Restaurants’s EPS is notably higher than the industry average. The company achieved a positive bottom-line trend with a current EPS of 1.75.

Debt Management: Darden Restaurants’s debt-to-equity ratio is below the industry average at 2.48, reflecting a lower dependency on debt financing and a more conservative financial approach.

Valuation Metrics:

• Price to Earnings (P/E) Ratio: The current P/E ratio of 19.39 is below industry norms, indicating potential undervaluation and presenting an investment opportunity.

• Price to Sales (P/S) Ratio: With a lower-than-average P/S ratio of 1.77, 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): With an EV/EBITDA ratio lower than industry benchmarks at 13.88, Darden Restaurants presents an attractive value opportunity.

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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Why Insider Transactions Are Key in Investment Decisions

Insider transactions shouldn’t be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

Exploring the legal landscape, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated by Section 12 of the Securities Exchange Act of 1934. This encompasses executives in the c-suite and major hedge funds. These insiders are required to report their transactions through a Form 4 filing, which must be submitted within two business days of the transaction.

Highlighted by a company insider’s new purchase, there’s a positive anticipation for the stock to rise.

But, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

The Insider’s Guide to Important Transaction Codes

Taking a closer look at transactions, investors often prioritize those unfolding in the open market, meticulously cataloged in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C denotes the conversion of an option, and transaction code A signifies 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.