Ticker: NYSE: DAR 🧪🍔✈️
Price (Oct 23, 2025 close): $34.67 (+11.41%)

Darling Ingredients is the rare company that can turn yesterday’s fryer oil and animal by-products into tomorrow’s collagen peptides, pet-food proteins, renewable diesel, and—soon—sustainable aviation fuel (SAF). That’s not just recycling; that’s re-alchemy. After a bruising 2024, Q3 2025 landed with a sales beat and a reminder that the core ingredients engine still has plenty of torque.

The Fresh Print: Why the Stock Popped 📈🎉

• Q3 sales: $1.6B, ahead of expectations.

• Q3 net income: $19.4M vs $16.9M last year.

• Combined Adjusted EBITDA: $244.9M (Q3), $690.2M YTD.

• PTC monetization: Agreed to sell $125M in Production Tax Credits (PTCs) in Q4, with another $125–175M targeted by year-end.

• 2025 outlook (core ingredients): $875–900M Adjusted EBITDA (ex-DGD).

Narrative: The core ingredients business (Feed + Food + specialty solutions) is doing the heavy lifting, while the Diamond Green Diesel (DGD) JV is still digesting a tough market for renewable credits and feedstocks. Management’s shift to guiding only the core reduces the noise and highlights the part that’s working.

 👉 Want the full picture? Dive into Darling Ingredients (DAR)'s financials here.

What Darling Actually Does (And Why It’s Interesting) 🏭♻️

Darling is a circular-economy platform:

• Feed Ingredients: animal proteins/meals, feed-grade fats, plasma, organic fertilizers.

• Food Ingredients: collagen & gelatin (Rousselot, Gelnex), edible fats, casings; expanding into health, wellness & pharma.

• Fuel Ingredients: yellow grease, UCO, and feedstocks for renewable diesel through DGD (50/50 with Valero)—plus SAF coming online at Port Arthur.

Think of it as a value-add waste-to-worth machine with real optionality in wellness (collagen) and low-carbon fuels (renewables/SAF).

The Good, The Meh, and The Fix-It List ✅🤷🧰

✅ What’s Working

• Core ingredients momentum: Broad-based strength, price/mix discipline, and demand from food, pet, and pharma customers.

• PTC sales = cash now: Converting credits into dollars helps liquidity and flexibility.

• Valuation reset: Forward P/E ~9.5×, P/B ~1.1×, P/S ~0.9×. That’s “value aisle,” not “boutique markup.”

• Strategic catalysts:

  • Collagen JV (Nextida) with Tessenderlo: Creates a ~$1.5B revenue collagen platform; 85% owned and consolidated by DAR.

  • DGD Port Arthur SAF project: Post-completion, ~50% of 470M gpy can be upgraded to SAF—positioning DAR among the largest SAF suppliers globally.

🤷 Still a Work-In-Progress

• DGD volatility: Overcapacity and soft credit prices crushed margins; Q3 DGD EBITDA to DAR was ~(2¢) per gallon, though 9-month average was ~13¢. Directionally better, but still choppy.

• Leverage: Net debt ~$4.0B, bank covenant leverage ~3.65×; capex still meaningful. Balance sheet is fine, not feather-light.

🧰 The Fix-It / Watch List

• Policy path: LCFS/SAF incentives and PTC markets are crucial tailwinds; clarity = confidence.

• Feedstock costs: Waste fats/oils pricing affects margins at both ingredients and fuels.

• Execution on JVs: Nextida collagen and Port Arthur SAF need to hit milestones and scale profitably.

Valuation: Value Play or Value Trap? 🧮🪤

Key valuation gauges show:

• Forward P/E ~9.5× (vs teens last year)

• P/B ~1.1× | P/S ~0.9×

• EV/EBITDA ~11.3× (headline; keep in mind core vs DGD split)

Read: The market is pricing a credible recovery in core + option value in DGD/SAF—without giving DAR a growth-stock halo. If the core keeps compounding and SAF ramps on schedule, multiple expansion is plausible. If fuels lag longer than expected, it can stay “cheap” a while longer.

Competitive Chessboard ♟️

• Ingredients: Global ag & protein giants (Cargill, JBS, Tyson, Perdue) and specialty peers. Darling’s moat is scale, sourcing, and processing know-how across continents.

• Renewable fuels: Integrated energy, traders, and emerging SAF players. Here, policy, feedstock logistics, and plant reliability are the meta-game.

The Set-Up: Why This Could Work 📦📈

1. Core ingredients throwing off steady EBITDA with room for incremental margin if mix skews toward premium collagen/pharma.

2. SAF optionality at scale: airlines have decarbonization mandates; reliable supply with defensible feedstock sourcing is scarce.

3. Valuation support: Deep drawdown (~60% below ATH), now at “show me” multiples.

4. Institutional sponsorship: >100% of float held reflects lending/short mechanics, but still signals serious attention.

For Darling Ingredients (DAR)'s Institutional Ownership breakdown, 🔍 see here.

The Counterpoint: Why It Might Not 🧊

• Leverage + rate sensitivity: With 3.65× covenant leverage, higher rates and slower EBITDA could bite. Interest coverage seems thin (~1.1× EBIT/interest).

• DGD margin risk: Overcapacity and weak credit prices can linger.

• Execution risk: New JVs and SAF conversion need to deliver on timeline and returns.

• Macro & risk-off: In a wobbly market, even value can get more “value.”

💡💡💡 Curious about another deep oil exploration play?
Check our takes on UnitedHealth Group or even Oscar Health.

Fun + Smart Take (a.k.a. The Vibe) 😎🧠

DAR today looks like a core-value operator with two free call options:

• Collagen (compounding, premium, brand-able)

• SAF (reg-driven growth, capacity at scale)

The market is finally separating core ingredients (good) from fuel noise (fixable). If you like circular economy + optionality, and you can handle policy/credit volatility, this setup is interesting. If you want a straight line up and to the right, this isn’t that… yet.

Quick Take / TL;DR ⚡

• Beat & bounce: Q3 $1.6B sales; stock +11%.

• Core > fuel (for now): 2025 core ingredients EBITDA $875–900M; guiding ex-DGD to cut noise.

• PTCs → cash: $125M sold in Q4; another $125–175M targeted by YE.

• Catalysts: Nextida collagen JV and Port Arthur SAF scale-up in 2025.

• Valuation: Forward P/E ~9.5×, P/B ~1.1×, P/S ~0.9× = value with upside if execution lands.

• Risk: Leverage, policy/credit volatility, fuel margins, execution.

FAQ ❓

Q: Why guide only the core ingredients now?
A: To reduce volatility in expectations. Policy and credit markets whipsaw DGD; the core is steadier and easier to forecast.

Q: Is the beat sustainable?
A: The core has momentum; DGD/SAF is the swing factor. Watch policy clarity, feedstock costs, and the SAF ramp.

Q: Is this a “turnaround” or a “through-cycle” story?
A: Both. 2024’s slump reset expectations; 2025–26 is about core compounding + fuel recovery.

Q: How do rising rates affect DAR?
A: Higher interest costs pressure coverage and capex math. That’s why EBITDA growth + PTC monetization matter.

Q: What would change your mind?
A: Slippage on the SAF timeline, persistent negative DGD margins, or unexpected core weakness.

🧾⚠️📢 Fun(ny) Disclaimer: 🧾⚠️📢

🧫 Disclosure: We love a good circular economy glow-up, but even darlings can disappoint.

Always DYOR, hold the FOMO, and don’t invest what you can’t afford to lose. Also, keep your humor cells alive. 🧬😄  

We laugh, we analyze, we meme. We sell jokes and opinions — and yes, we’re billing your sense of humor. 🎪💸 
We’re not financial advisors. We’re FUNancial advisors. 

Invest at your own risk. 💸💧 

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