5 Most Undervalued Growth Stocks To Buy According To Analysts

4. Darling Ingredients Inc. (NYSE:DAR)

Number of Hedge Fund Holders: 29

Average Analyst Price Estimate: $90.14

Food ingredients company Darling Ingredients Inc. (NYSE:DAR) saw a 30% growth in revenue during the first quarter. Its GAAP EPS in the period came in at $1.14, beating estimates by $0.14.

Darling Ingredients Inc. (NYSE:DAR)’s one-year average analyst price target is $90.14, which shows a huge upside potential from its May 22 levels ($65).

SouthernSun Small Cap Strategy made the following comment about Darling Ingredients Inc. (NYSE:DAR) in its Q1 2023 investor letter:

“Darling Ingredients Inc. (NYSE:DAR), was a top detractor for the quarter. A global leader in renewable energy and sustainable food and feed ingredients, DAR delivered strong year-end results with a record $1.541 billion in EBITDA despite margin pressure from the company’s recent acquisition of Valley Proteins and fires at two rendering facilities. The company ambitiously acquired three companies in 2022, Op de Beeck in Belgium, Valley Proteins in the U.S. and FASA Group in Brazil. Darling just completed its announced acquisition of Gelnex on 3/31/2023, and are on track to complete the announced acquisition of Miropasz by the third quarter of this year. Darling has furthermore deployed capital at its Diamond Green Diesel facility in Port Arthur, Texas, increasing renewable diesel production to 1.2 billion gallons per year. These investments have unsurprisingly increased the company’s debt ratio to slightly over 3x, but have also further strengthened Darling’s vertical supply chain integration and market presence to an impressive degree. Finally, the company announced in late January that DGD will invest $315 million in a Sustainable Aviation Fuel (SAF) project at the Port Arthur plant. Upon completion in 2025, the plant will have the capability to upgrade 50% of its current 470 million gallon annual production capacity to SAF. In a global market seeking to decarbonize, Darling addresses this critical need while processing 1 out of every 7 animals into food ingredients, feed ingredients and renewable energy. We continue to be impressed with management’s ability as well as their track record to capitalize on opportunities and enhance optionality to ultimately drive value over the long term.”