Diamondback (FANG) AI Stock Analysis

• Market Cap: $40.07B
• Dividend Yield: 2.85%
• Average Volume (3M): 1.97M
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.65
• Revenue Growth: 51.78%
• EPS Growth: -27.29%
• Country: US
• Employees: 1,983
• Sector: Energy
• Sector Strength: 54
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 2.67
• Shares Outstanding: 289,486,100
• 10 Day Avg. Volume: 1,713,591
• 30 Day Avg. Volume: 1,965,147
• 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: 1.47
• Enterprise Value/Revenue: 4.21
• Enterprise Value/Gross Profit: 10.45
• Enterprise Value/Ebitda: 6.07
• 1Y Price Target: $183.85
• Price Target Upside: 34.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 22

• Rating: 77 Outperform
• Price Target: $161.00 ▲(17.62% Upside)

Diamondback Energy's strong financial performance and attractive valuation are key strengths, supported by positive corporate events and a solid earnings call. However, technical indicators suggest caution due to potential overbought conditions, and operational risks such as declining EBIT margins and negative free cash flow need addressing.

Positive Factors

Revenue Growth

Sustained revenue growth indicates robust market demand and effective business strategies, enhancing long-term profitability and market position.

Asset Sales

Strategic asset sales improve liquidity and focus on core operations, allowing for reinvestment in high-return areas and debt reduction.

Operational Efficiency

Enhanced operational efficiency reduces costs and increases production capacity, supporting sustainable growth and competitive advantage.

Negative Factors

Negative Free Cash Flow

Negative free cash flow suggests high capital expenditures, which can strain liquidity and limit financial flexibility, impacting long-term stability.

EBIT Margin Decline

Declining EBIT margins indicate rising costs or inefficiencies, which could erode profitability and require strategic adjustments to maintain competitiveness.

Cost Inflation

Rising operational costs due to tariffs could pressure margins and necessitate cost management strategies to sustain profitability.

Diamondback Business Overview & Revenue Model

Company Description

Diamondback 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 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	-5.31B	3.55B	1.21B	2.82B	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: Negative
• Last Price: 136.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FANG, the sentiment is Negative. The current price of 136.88 is below the 20-day moving average (MA) of 141.71, below the 50-day MA of 141.93, and below the 200-day MA of 147.97, indicating a bearish trend. The MACD of -1.10 indicates Positive momentum. The RSI at 41.77 is Neutral, neither overbought nor oversold. The STOCH value of 18.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FANG.

Diamondback Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FANG	77 Outperform	$40.07B	9.84	13.55%	2.85%	51.78%	-27.29%
DVN	77 Outperform	$22.40B	7.90	20.60%	3.28%	10.98%	-19.25%
EOG	76 Outperform	$65.52B	11.67	19.63%	3.25%	-5.42%	-20.52%
EQT	72 Outperform	$31.80B	27.52	6.26%	1.24%	59.12%	12.12%
CTRA	71 Outperform	$18.59B	11.67	11.42%	3.57%	16.56%	20.21%
OXY	71 Outperform	$45.30B	27.04	6.98%	2.06%	-1.66%	-58.96%
Sector *	65 Neutral	$15.18B	7.59	4.09%	5.21%	3.87%	-62.32%

Diamondback Corporate Events

Diamondback Amends Credit Agreement with Wells Fargo

On June 12, 2025, Diamondback Energy, Inc. and Diamondback E&P LLC amended their Credit Agreement with Wells Fargo Bank, extending the maturity date to June 12, 2030, and reducing interest rates and certain fees. This amendment, which maintains other terms of the Credit Agreement, is expected to enhance the company’s financial flexibility and could positively impact its operations and stakeholder relations by lowering borrowing costs.

Viper Energy Announces Merger with Sitio Royalties

On June 2, 2025, Viper Energy, a subsidiary of Diamondback Energy, announced an all-equity merger agreement to acquire Sitio Royalties Corp. valued at approximately $4.1 billion, including Sitio’s net debt. The transaction, subject to customary closing conditions, received approval from Diamondback stockholders, who hold a majority of Viper’s voting power. A support agreement was also signed, restricting the transfer of Viper’s common stock until 90 days post-transaction, indicating a strategic move to consolidate and strengthen Diamondback’s position in the energy sector.