Darling is in a powerful primary uptrend that has begun to stall: the stock is up 62.2% over the past year and 49.4% year-to-date, massively outperforming the S&P 500's 13.1% and 11.5% respective gains, with a relative strength of +49.1 percentage points over 12 months. At $56.24, the shares sit at roughly 66% of the 52-week range between the $31.48 low and $69.98 high — meaningfully below the highs but far above the lows, a positioning that reflects a maturing advance rather than either a fresh breakout or a value dislocation. The 52-week high was set in the August-September window near $68-70, and the failure to reclaim that zone on multiple attempts suggests the momentum phase has transitioned into a corrective consolidation. Recent momentum is clearly decelerating and diverging from the longer-term trend: the stock is down 8.3% over one month and 10.0% over three months, versus a 1.0% decline and 2.9% gain for SPY over the same windows, producing relative strength of -7.3 and -12.9 points respectively. The 6-month change of -6.5% versus SPY's +6.5% confirms the divergence is not a one-off blip but a persistent loss of leadership since the spring, and the sharp drop from $59.09 on October 21 to $55.64 on October 22 — a single-session decline of roughly 5.8% on elevated volume of 2.18 million shares — signals distribution rather than orderly profit-taking. Key levels are well defined: support rests at the October low of $55.64 and, more importantly, the June 2026 trough near $52.50-53.00, while resistance sits at the $68-70 double-top region and the $69.98 52-week high. A break below $52.50 would confirm a lower-low structure and likely target the mid-$40s, whereas a reclaim of $62-63 (the broken September support) would be the first sign of stabilization; with a beta of 1.047 the stock moves roughly in line with the market, so the recent underperformance is idiosyncratic rather than a high-beta amplification effect, and the -19.03% max drawdown underscores that position sizing should account for meaningful single-quarter swings.

Revenue is re-accelerating decisively after a soft patch: Q2 2026 revenue of $1.724 billion grew 16.5% year-over-year versus $1.480 billion in Q2 2025, and rose sequentially from $1.551 billion in Q1 2026 and $1.719 billion in Q4 2025, marking the strongest top-line print in the trailing eight quarters. The segment mix shows Feed Ingredients as the dominant engine at $1.149 billion (roughly two-thirds of revenue), with Food Ingredients at $408.5 million and Fuel Ingredients at $166.1 million, meaning the growth story is heavily levered to rendering and feed by-product economics rather than the higher-multiple collagen/food franchise. The trajectory — from $1.377 billion in Q1 2025 through $1.480 billion, $1.562 billion, $1.719 billion and now $1.724 billion — implies a business that bottomed in early 2025 and has compounded sequentially for five straight quarters, a pattern consistent with recovering feedstock spreads and improved renewable-energy economics that materially strengthens the investment case if sustained. Profitability has inflected dramatically: Q2 2026 net income reached $387.3 million (EPS $2.44 diluted) against just $12.7 million in Q2 2025, with gross margin expanding to 46.9% from 15.1% and operating margin reaching 38.1% versus 5.3% a year prior — a roughly 3,200-basis-point gross-margin expansion in four quarters that is far above the 15-25% gross margins typical of rendering and packaged-food peers. The quarterly progression of net margin from -1.9% (Q1 2025) to 0.9%, 1.2%, 3.3%, 8.7% and 22.5% (Q2 2026) shows an unusually steep ramp, though the trailing-twelve-month net margin of just 1.02% and ROE of 1.33% reveal how much of the recovery is concentrated in the most recent quarter and how depressed the prior base was. Balance-sheet and cash-flow health is adequate but not fortress-like: debt-to-equity stands at 0.88, the current ratio at 1.50, and TTM free cash flow at $881 million against a $5.97 billion market cap implies an FCF yield of roughly 14.8%, which is genuinely attractive and suggests the company can fund capex internally. Q2 2026 operating cash flow of $533.5 million comfortably covered $128.9 million of capex (a 4.1x capex coverage ratio), and the company repaid $168.0 million of debt while repurchasing $73.4 million of stock, but interest expense of $163.8 million in the quarter remains a meaningful drag and ROA of 3.54% is modest for an asset-heavy processing business.