Diamondback (FANG) AI Stock Analysis

• Market Cap: $42.22B
• Dividend Yield: 2.7%
• Average Volume (3M): 2.02M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.69
• Revenue Growth: 51.78%
• EPS Growth: -27.29%
• Country: US
• Employees: 1,983
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 2.67
• Shares Outstanding: 289,486,100
• 10 Day Avg. Volume: 1,778,404
• 30 Day Avg. Volume: 2,024,089
• PEG Ratio: -1.00
• Price to Book (P/B): 0.93
• Price to Sales (P/S): 3.17
• P/FCF Ratio: 9.87
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 4.21
• Enterprise Value/Gross Profit: 10.45
• Enterprise Value/Ebitda: 6.07
• 1Y Price Target: $181.55
• Price Target Upside: 24.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 23

• Rating: 67 Neutral
• Price Target: $154.00 ▲(5.58% Upside)

Diamondback Energy's overall score reflects strong financial performance and reasonable valuation, tempered by technical indicators suggesting caution. The company's robust revenue growth and solid balance sheet are significant strengths, but operational efficiency and cash flow management need improvement. Technical analysis indicates a balanced outlook, while valuation metrics suggest the stock is fairly priced.

Positive Factors

Revenue Growth

Consistent revenue growth indicates effective market penetration and product demand, strengthening Diamondback's market position in the oil and gas sector.

Operational Efficiency

Improved drilling efficiency reduces operational costs and enhances production capabilities, supporting long-term profitability and competitive advantage.

Balance Sheet Health

A strong balance sheet with minimal leverage provides financial stability, enabling Diamondback to navigate market fluctuations and invest in growth opportunities.

Negative Factors

Cost Inflation

Rising operational costs due to tariffs can pressure margins and profitability, potentially impacting Diamondback's ability to maintain cost efficiency.

Free Cash Flow Concerns

Negative free cash flow suggests liquidity challenges, which may limit Diamondback's ability to fund new projects or return capital to shareholders.

Market Uncertainty

Market uncertainty and potential lower oil prices could hinder growth prospects and necessitate operational adjustments, affecting long-term strategic planning.

Diamondback Business Overview & Revenue Model

Company Description

Diamondback Energy, Inc. (FANG) is an independent oil and natural gas company based in Midland, Texas. The company is primarily engaged in the acquisition, exploration, development, and production of unconventional oil and natural gas reserves in the Permian Basin, one of the most prolific oil-producing regions in the United States. Diamondback's core operations focus on high-quality resource plays and they utilize advanced technologies and efficient operational practices to maximize production and profitability.

How the Company Makes Money

Diamondback Energy generates revenue primarily through the sale of crude oil, natural gas liquids (NGLs), and natural gas produced from its extensive portfolio of oil and natural gas properties. The company employs a vertical integration strategy, which includes exploration, drilling, and production activities, allowing it to control costs and optimize output. Key revenue streams include direct sales of hydrocarbons to refiners, marketers, and other end-users, as well as potential revenue from hedging activities that protect against price volatility. Additionally, Diamondback benefits from strategic partnerships and joint ventures that enhance its operational capabilities and expand its resource base, contributing to its overall earnings.

Diamondback Financial Statement Overview

Summary

Diamondback exhibits strong revenue growth and profitability, supported by a stable balance sheet with minimal leverage. However, the negative free cash flow and declining EBIT margins pose potential risks. Overall, the company is financially sound but should focus on improving operational efficiency and cash flow management.

Income Statement

Diamondback has demonstrated strong revenue growth with a 9.43% increase in TTM, supported by a robust gross profit margin of 77.71%. The net profit margin is healthy at 27.28%, indicating efficient cost management. However, the EBIT margin has decreased compared to previous periods, suggesting potential operational challenges.

Balance Sheet

The company maintains a very low debt-to-equity ratio of 0.00036 in TTM, highlighting strong financial stability. Return on equity is moderate at 10.06%, reflecting decent profitability. The equity ratio stands at 54.05%, indicating a solid capital structure. However, the slight decrease in ROE compared to previous years suggests room for improvement in generating returns.

Cash Flow

Operating cash flow is strong with a coverage ratio of 2.02, but the negative free cash flow indicates significant capital expenditures or investments. The free cash flow to net income ratio is negative, highlighting potential liquidity concerns. Despite this, the company has shown a positive trend in operating cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.01B	11.02B	8.34B	9.57B	6.75B	2.81B
Gross Profit	5.65B	4.97B	4.80B	6.70B	4.27B	637.00M
EBITDA	9.71B	7.64B	6.17B	7.23B	4.37B	-4.27B
Net Income	3.84B	3.34B	3.14B	4.39B	2.18B	-4.52B
Balance Sheet
Total Assets	71.94B	67.29B	29.00B	26.21B	22.90B	17.62B
Cash, Cash Equivalents and Short-Term Investments	219.00M	161.00M	582.00M	157.00M	654.00M	104.00M
Total Debt	15.13B	12.43B	6.80B	6.38B	6.77B	5.93B
Total Liabilities	29.12B	27.43B	11.57B	10.52B	9.65B	7.82B
Stockholders Equity	38.88B	37.74B	16.63B	15.01B	12.09B	8.79B
Cash Flow
Free Cash Flow	-8.44B	-5.37B	1.21B	2.71B	1.67B	74.00M
Operating Cash Flow	7.58B	6.41B	5.92B	6.33B	3.94B	2.12B
Investing Cash Flow	-15.65B	-11.22B	-3.32B	-3.33B	-1.54B	-2.10B
Financing Cash Flow	1.38B	4.39B	-2.18B	-3.50B	-1.84B	-37.00M

Diamondback Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 145.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FANG, the sentiment is Positive. The current price of 145.86 is above the 20-day moving average (MA) of 143.76, above the 50-day MA of 142.52, and above the 200-day MA of 144.84, indicating a neutral trend. The MACD of 0.34 indicates Negative momentum. The RSI at 52.66 is Neutral, neither overbought nor oversold. The STOCH value of 70.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FANG.

Diamondback Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EQT	―	$33.51B	18.32	8.19%	1.17%	64.84%	219.47%
EOG	―	$58.08B	10.34	19.63%	3.69%	-5.42%	-20.52%
DVN	―	$20.93B	7.39	20.60%	2.85%	10.98%	-19.25%
CTRA	―	$17.97B	11.29	11.42%	3.68%	16.56%	20.21%
FANG	―	$42.22B	10.37	13.55%	2.70%	51.78%	-27.29%
Sector *	―	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
OXY	―	$41.91B	25.01	6.98%	2.22%	-1.66%	-58.96%

Diamondback Corporate Events

Diamondback Energy Reports Strategic Focus Amid Uncertainty

Diamondback Energy, Inc., a prominent player in the oil and gas sector, is known for its operations in the Permian Basin, focusing on the exploration and production of oil and natural gas. In its latest earnings report, Diamondback Energy highlighted its strategic focus on maintaining oil volumes while reducing capital expenditures amidst ongoing macroeconomic uncertainties. The company reported a reduction in its 2025 capital budget and a decrease in rig activity, emphasizing efficiency gains and synergies from recent mergers. Key financial metrics revealed a robust operational performance, with oil production averaging near the top of the guidance range and significant free cash flow generation. Diamondback Energy also continued its commitment to shareholder returns through dividends and aggressive share repurchases. Looking ahead, the company remains focused on maintaining operational flexibility and cost discipline, with plans to leverage its drilled but uncompleted wells to quickly respond to market demands.

Diamondback Energy Balances Efficiency with Caution in Earnings Call

Diamondback Energy’s recent earnings call conveyed a mixed sentiment, balancing strong operational achievements with cautionary notes. The company showcased its robust operational efficiencies, significant asset sales, and effective cost management strategies. However, these positives were offset by concerns regarding potential tariff impacts on casing costs and a cautious macroeconomic outlook, which could influence future growth decisions.