Darling Ingredients Inc. DAR is building more of its Food segment around collagen, where the economics are materially different from traditional gelatin. The company’s second-quarter 2026 materials point to growing collagen demand across the United States, Europe and Asia, along with broader applications in food, nutrition and health products. Collagen sales improved year over year, while higher whey prices are creating an additional use case, with collagen being used as a protein complement or replacement in certain whey applications.
The margin profile highlights why this shift is important. In the current market environment, collagen generates roughly 2.5 to 3 times the margin of gelatin, while targeted ingredients can generate 7 to 11 times the margin of gelatin. Rousselot, which represents the majority of the Food segment, can produce these higher-margin products using its existing factories and infrastructure. This provides scope to improve EBITDA and implied net cash through product-mix optimization using the existing asset base.
The shift toward higher-value products is already visible in the mix. Collagen represented about 20% of Food-segment volume in 2020 and 30% in 2025, with its share estimated at 33% by 2030. Its contribution to adjusted EBITDA increased from 35% in 2020 to 48% in 2025 and is estimated at 50% by 2030. Targeted ingredients are estimated to account for 15% of Food-segment adjusted EBITDA by 2030. With collagen demand expanding in Asia and Darling Ingredients producing about 30% of the world’s collagen, including gelatin and hydrolyzed collagen, it has a sizable global operating base as the product mix shifts toward higher-value offerings.
Darling Ingredients’ Zacks Rank & Share Price Performance
Shares of this Zacks Rank #2 (Buy) company have gained 20.5% in the past three months compared with the broader Consumer Staples sector and the industry’s growth of 0.8% and 3.6%, respectively. EL has also outperformed the S&P 500 index’s growth of 0.8% during the same period.
DAR Stock's Past Three Months Performance
Image Source: Zacks Investment Research
Is DAR a Value Play Stock?
Darling Ingredients currently trades at a forward 12-month P/E ratio of 10.07, which is down from the industry average of 14.56 and notably below the sector average of 17.06. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
DAR P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Other Stocks to Consider
The Chefs' Warehouse, Inc. CHEF distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.6% and 33.7%, respectively, from the year-ago reported figures. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
The Vita Coco Company, Inc. COCO develops, manufactures, markets and distributes coconut water products under the Vita Coco brand name in the United States, Canada, Europe, the Middle East, Africa and the Asia Pacific. COCO currently sports a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 21.9%, on average.
The Zacks Consensus Estimate for Vita Coco’s current fiscal-year sales and earnings indicates growth of 31.6% and 63.9%, respectively, from the year-ago reported numbers.
Utz Brands UTZ engages in the manufacture, marketing and distribution of snack foods in the United States and presently carries a Zacks Rank of 2. UTZ delivered a trailing four-quarter earnings surprise of 1.8%, on average.
The Zacks Consensus Estimate for Utz Brands’ current financial-year sales indicates growth of 3.7% from the year-ago numbers.
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Darling Ingredients Inc. (DAR): Free Stock Analysis Report
Vita Coco Company, Inc. (COCO): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).