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Diamondback (FANG)
NASDAQ:FANG
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Diamondback
(NASDAQ:FANG)
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Rating:80Outperform
Price Target:
$200.00
â–²(15.06% Upside)
Action:ReiteratedDate:02/25/26
Score is driven primarily by strong financial resilience (very conservative leverage and solid operating cash flow) and a constructive earnings-call outlook tied to the Barnett resource expansion and efficiency improvements. Technicals support the trend but look somewhat stretched, while valuation is reasonable and dividend yield adds support.
Positive Factors
Strong balance sheet
Diamondback's exceptionally low leverage and ~$0.8B total debt give it durable financial flexibility. This conservatism supports continued capex, buybacks, and debt reduction through cycles, allowing the company to prioritize capital returns or opportunistic M&A without immediate funding stress.
Robust operating cash flow
Consistent operating cash generation that covered net income ~1.9x in 2025 underpins Diamondback's ability to self-fund operations and return capital. Reliable OCF supports reinvestment, buybacks and debt paydown over multiple quarters even when FCF timing is variable.
Scale-driven operational efficiency
The post-merger scale and execution gains (fewer rigs to drill more wells, longer laterals, lower well costs) lower per-unit breakeven and improve capital productivity. Those structural efficiency improvements strengthen competitive position in the Permian and support sustained margin advantage.
Negative Factors
Commodity-price sensitivity
Diamondback remains highly exposed to oil and gas price swings; the meaningful profitability deterioration in 2025 shows earnings and margins can compress rapidly. This cyclicality limits predictability of cash returns and forces capital-plan adjustments if prices weaken materially.
Lumpy free cash flow
Volatile free cash flow driven by uneven capex and working-capital timing complicates sustaining steady buybacks or dividends. While OCF is solid, FCF swings reduce planning visibility for shareholders and can necessitate abrupt capital discipline or curtailed returns in weaker periods.
High Waha gas exposure
Concentrated exposure to Waha basis discounts realized gas prices and can materially depress gas-margin contribution. Although management plans to reduce exposure to ~40% by 2026, near-term earnings and cash flow remain vulnerable until marketing diversification is executed.
Diamondback (FANG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$49.86B
Dividend Yield2.7%
Average Volume (3M)1.96M
Price to Earnings (P/E)12.1
Beta (1Y)0.73
Revenue Growth60.29%
EPS Growth-17.62%
CountryUS
Employees1,983
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)1.74
Shares Outstanding286,525,600
10 Day Avg. Volume2,001,841
30 Day Avg. Volume1,959,177
Financial Highlights & Ratios
PEG Ratio-0.41
Price to Book (P/B)1.18
Price to Sales (P/S)2.89
P/FCF Ratio8.30
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue3.34
Enterprise Value/Gross Profit6.70
Enterprise Value/Ebitda6.85
Forecast
1Y Price Target
$182.05Price Target Upside4.74% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering20
EPS Forecast (FY)9.88
Revenue Forecast (FY)$13.51B
Diamondback Business Overview & Revenue Model
Company DescriptionDiamondback Energy, Inc., an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. As of December 31, 2021, the company's total acreage position was approximately 524,700 gross acres in the Permian Basin; and estimated proved oil and natural gas reserves were 1,788,991 thousand barrels of crude oil equivalent. It also held working interests in 5,289 gross producing wells, as well as royalty interests in 6,455 additional wells. In addition, the company owns mineral interests approximately 930,871 gross acres and 27,027 net royalty acres in the Permian Basin and Eagle Ford Shale; and owns, operates, develops, and acquires midstream infrastructure assets, including 866 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.
How the Company Makes MoneyDiamondback Energy generates revenue primarily through the sale of crude oil, natural gas liquids, and natural gas. The company employs a strategy of acquiring and developing high-quality assets in the Permian Basin, allowing it to benefit from lower production costs and higher margins. Key revenue streams include direct sales of hydrocarbons to refineries and pipelines, as well as hedging strategies that lock in prices for future production. Diamondback also partners with midstream companies to optimize transportation and processing of its products, further enhancing its profitability. Additionally, the company may derive income from joint ventures and strategic partnerships that enable shared access to resources and technology, contributing to its overall earnings.
Diamondback Key Performance Indicators (KPIs)
Any
Production by Segment
Shows the output from different business areas, highlighting which segments drive growth and profitability, and indicating operational focus and efficiency.
Shows the output from different business areas, highlighting which segments drive growth and profitability, and indicating operational focus and efficiency.
Data provided by:
The Fly
The FlyDiamondback Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call skewed positive: management disclosed a meaningful organic resource expansion (Barnett) with strong early productivity metrics (substantial per-foot and EUR uplifts), material operational efficiency gains (continuous pumping, longer laterals) and promising early surfactant results that together point to upside in NAV and returns if costs and execution track targets. Key near-term risks include elevated Barnett unit costs today (with a clear roadmap to reduce them), increased gas exposure requiring marketing/realization solutions, modest OpEx headwinds, supply‑chain/tariff uncertainty, and noncash accounting-driven reserve/impairment impacts tied to lower commodity prices. Overall, the positives (resource, productivity, efficiency, pilot uplifts and inventory depth) noticeably outweigh the negatives, while the negatives are mostly execution, price- and accounting-related and are addressable over time.Q4-2025 Updates
Positive Updates
Material Resource Expansion — Barnett Opportunity
Revealed a ~900 gross location Barnett position added organically to the portfolio; management allocated $150 million of the $3.75 billion 2026 budget to initial Barnett activity. Plan ramps: ~30 gross wells drilled in 2026 (with ~10 completions) and a significant step-up to ~100 gross wells in 2027.
Strong Barnett Productivity vs. Core Midland
Barnett wells show materially higher productivity: ~36 MBOE per 1,000 ft 12-month cum versus ~22 MBOE per 1,000 ft for core Midland (≈63.6% higher) and management estimates Barnett EUR ≈75 BO/ft vs core ≈50 BO/ft (≈50% uplift in BO/ft). Barnett 12-month oil mix ~67% (flatter GOR profile vs core).
Pathway to Competitive Well Costs in Barnett
Current Barnett well costs ~ $1,000/ft with a target to reduce to ~$800/ft through development-mode execution (multi-pad, simul-frac, extended laterals ~15,000 ft+) and operational learnings — bringing costs down toward this target would make returns competitive versus core Midland (~$510–$520/ft).
Inventory Depth and Lateral-Length Gains
Company reiterated ~two decades (nearly 20 years) of inventory at 2026 activity pace. Average lateral length increased by ~600 ft year-over-year, contributing to higher per‑well productivity and capital efficiency.
Surfactant Trials Showing High Early ROI
60-well surfactant production pilot deployed in H2 2025; typical treatment cost ~ $0.5 million per well. Early results show average production uplifts of ~100 barrels/day on treated wells, with several cases delivering multi-hundred b/d uplifts — indicating potentially high-return remedial interventions.
Drilling and Completion Efficiency Improvements
Continuous‑pumping simul-frac fleets averaging ~4,500 completed lateral feet/day (with observed peaks >5,500 ft/day). Team achieving sub-6 day wells on occasion with company average spud-to-TD ~8+ days and expects further cycle- and cost-reductions; these efficiencies have potential to reduce cycle time, lower service intensity and improve capital efficiency.
Balance Sheet / Capital Discipline
Management emphasized no external capital raises for Barnett buildout and continued shareholder returns while adding inventory. Capital allocation philosophy remains conservative with ability to hold or reallocate DUCs and capital based on macro conditions.
Reserve & Bookings Transparency
Reserve profile remains weighted toward PDP (≈70% PDP / 30% PUD). Management stated recent reserve revisions were primarily price-driven and from PUD timing adjustments rather than material performance deterioration.
Negative Updates
Barnett Unit Costs Currently Elevated
Barnett well costs are currently ~ $1,000/ft (target ~ $800/ft); materially higher than core Midland (~$510–$520/ft). Achieving the target cost reduction is required to make Barnett returns consistently competitive — execution and execution-led cost cuts remain a near-term challenge.
Corporate Oil Mix Pressure and Gas Exposure
As Barnett activity grows, corporate oil cut is expected to decline over time (Barnett ~67% oil vs core ~75–80% in early months). Management flagged need for improved gas marketing/realizations (and potential power PPA/data center solutions) to offset higher gas volumes and protect cash returns.
Guidance Showing Small OpEx Headwinds
2026 guidance includes small increases in LOE and G&P driven by the EDS sale impacts, higher basin power costs (estimated ~$0.10–$0.20 impact), increased workover/plug-and-abandon spend and contractual GPT escalators / more molecules taken in kind.
Tariff and Supply-Chain Uncertainty
Recent tariff rulings create uncertainty and potential inflation on casing and OCTG costs (Section 232 impacts unclear). Casing repricing is indexed/quarterly and tubular procurement remains sensitive to market and lead-time choices.
Accounting-Driven Noncash Impairment / Reserve Downgrades
Management disclosed noncash impairment/reserve revisions driven largely by lower pricing vs. prior book assumptions (example: assets booked at ~$80/bbl now faced with ~$64 average leading to writedowns). Management referenced ~130 million barrels of reserve revision tied to price effects.
Early-Stage Technical Initiatives — Unproven at Scale
Surfactant program and Barnett delineation results are promising but early-stage; management acknowledged more testing/refinement required before these initiatives are fully embedded in guidance or the base-case plan.
Working Interest and Leasing Considerations
Barnett working interests in some areas are lower (example referenced ~64% WI in portions of the stack) — management noted opportunities to increase WI but acknowledged the position was largely built through partnerships and organic leasing, which could limit near-term control or returns until netting-up occurs.
Company Guidance
Diamondback guided a $3.75 billion 2026 capital plan (with ~$150 million initially allocated to the newly disclosed Barnett program), saying Barnett adds ~900 gross locations and will see roughly 30 gross wells drilled (≈10 turned to sales) in 2026, ramping to ~100 gross wells in 2027; Barnett delineation currently runs near $1,000/ft with a target to get to ~$800/ft (versus core Midland development at roughly $510–$520/ft), and Barnett productivity looks materially higher (≈36 MBOE per 1,000 ft 12‑month cum vs ~22 for core, ~75 BO/ft EUR vs ~50 BO/ft for core, ~67% oil mix over 12 months and initial GORs ~3,000), the company expects nearly two decades of inventory at 2026 activity levels, average lateral lengths rose ~600 ft y/y, completion efficiency is improving (continuous‑pumping fleets averaging ~4,500 ft/day with peaks >5,500), drills averaged >8 days spud‑to‑TD with some sub‑6‑day wells, surfactant pilots (60 treatments at ≈$0.5M each) have shown ~100 bbl/d average pops (some multi‑hundreds), LOE and GP&T guidance model a small uptick (power costs may add ~$0.10–$0.20/boe), PDP/PUD mix is ~70%/30%, and reserve/impairment movements were largely price‑driven (analysts noted ~130 MMbbl of price‑related revisions).Diamondback Financial Statement Overview
Summary
Strong balance sheet and liquidity profile with exceptionally low leverage (debt-to-equity near ~0.02) and robust operating cash flow that consistently covers net income. Offsetting factors are sharp profitability deterioration in 2025 (annual) and notable free-cash-flow volatility typical of E&P cyclicality.Income Statement
Profitability has been strong over the cycle, with very high gross and EBITDA margins in 2021–2024 and solid net income through 2024. However, results weakened meaningfully in 2025 (annual): revenue contracted sharply (reported growth of -180%), net margin fell to ~11%, and operating profit was essentially breakeven despite a still-healthy EBITDA margin—suggesting higher non-cash charges and/or cost pressure. The history also shows commodity sensitivity (large losses in 2020), which tempers the overall quality score.72
Positive
Balance Sheet
Leverage improved dramatically in 2025 (annual), with total debt dropping to ~$0.8B and debt-to-equity near ~0.02, which is exceptionally conservative for the sector. Equity and assets are sizable, providing strong balance-sheet flexibility. The main caution is the notable year-to-year swing in debt levels (e.g., much higher in 2024), which indicates capital structure can change quickly depending on the cycle and capital returns strategy.88
Very Positive
Cash Flow
Cash generation is a clear strength: operating cash flow is robust and comfortably covers net income across the period (coverage above 1x each year shown), including 2025 (annual) at ~1.9x. Free cash flow is volatile—negative in 2024 despite positive earnings, then very strong in 2025—pointing to lumpy capital spending and/or working-capital swings typical of E&P. Overall cash flow quality is good, but variability reduces the score.79
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 15.03B | 11.02B | 8.34B | 9.57B | 6.75B |
| Gross Profit | 13.66B | 4.97B | 4.80B | 6.70B | 4.27B |
| EBITDA | 6.79B | 7.64B | 6.17B | 7.23B | 4.37B |
| Net Income | 1.66B | 3.34B | 3.14B | 4.39B | 2.18B |
Balance Sheet | |||||
| Total Assets | 71.06B | 67.29B | 29.00B | 26.21B | 22.90B |
| Cash, Cash Equivalents and Short-Term Investments | 104.00M | 161.00M | 582.00M | 157.00M | 654.00M |
| Total Debt | 763.00M | 12.43B | 6.80B | 6.38B | 6.77B |
| Total Liabilities | 28.09B | 27.43B | 11.57B | 10.52B | 9.65B |
| Stockholders Equity | 36.97B | 37.74B | 16.63B | 15.01B | 12.09B |
Cash Flow | |||||
| Free Cash Flow | 5.24B | -5.37B | 1.21B | 2.71B | 1.67B |
| Operating Cash Flow | 8.76B | 6.41B | 5.92B | 6.33B | 3.94B |
| Investing Cash Flow | -7.81B | -11.22B | -3.32B | -3.33B | -1.54B |
| Financing Cash Flow | -1.01B | 4.39B | -2.18B | -3.50B | -1.84B |
Diamondback Technical Analysis
Positive
173.82
Price Trends
156.67
Positive
151.21
Positive
145.72
Positive
Market Momentum
5.32
Negative
65.03
Neutral
84.48
Negative
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 173.82 is above the 20-day moving average (MA) of 166.29, above the 50-day MA of 156.67, and above the 200-day MA of 145.72, indicating a bullish trend. The MACD of 5.32 indicates Negative momentum. The RSI at 65.03 is Neutral, neither overbought nor oversold. The STOCH value of 84.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FANG.
Diamondback Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $49.86B | 12.10 | 10.92% | 2.70% | 60.29% | -17.62% | |
78 Outperform | $66.34B | 12.17 | 18.48% | 3.79% | -5.15% | -19.06% | |
77 Outperform | $27.36B | 10.65 | 17.60% | 2.64% | 11.14% | -21.32% | |
76 Outperform | $36.59B | 17.70 | 9.20% | 1.17% | 64.84% | 219.47% | |
74 Outperform | $23.87B | 14.52 | 11.86% | 3.39% | 26.13% | 31.42% | |
72 Outperform | $46.41B | 29.26 | 6.86% | 2.39% | -2.48% | -65.26% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
FANG
Diamondback
173.82
26.10
17.66%
CTRA
Coterra Energy
30.75
4.30
16.26%
DVN
Devon Energy
43.67
8.76
25.10%
EOG
EOG Resources
122.31
-4.32
-3.41%
EQT
EQT
59.03
10.76
22.30%
OXY
Occidental Petroleum
52.43
4.59
9.60%
Diamondback Corporate Events
Business Operations and StrategyStock Buyback
Diamondback Enters Share Agreement with SGF Holdings
Neutral
Dec 1, 2025
On November 28, 2025, Diamondback Energy, Inc. entered into a letter agreement with SGF FANG Holdings, LP, allowing SGF to sell up to 3,000,000 shares of Diamondback common stock per quarter through December 31, 2026, at the most recent NASDAQ closing price. As part of this agreement, Diamondback repurchased 2,000,000 shares from SGF at $152.59 per share, contributing to its ongoing share repurchase program. Since September 30, 2025, Diamondback has repurchased a total of 2,886,280 shares for $432 million, with $2.7 billion remaining under its $8 billion repurchase authorization. This agreement does not restrict SGF from selling shares through other means, maintaining flexibility in its stockholder agreement with Diamondback.
The most recent analyst rating on (FANG) stock is a Buy with a $176.00 price target. To see the full list of analyst forecasts on Diamondback stock, see the FANG Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.