Diamondback (FANG) AI Stock Analysis

• Market Cap: $39.95B
• Dividend Yield: 2.72%
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.67
• Revenue Growth: 51.78%
• EPS Growth: -27.29%
• Country: US
• Employees: 1,983
• Sector: Energy
• Sector Strength: 53
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 2.67
• Shares Outstanding: 289,486,100
• 10 Day Avg. Volume: 1,867,878
• 30 Day Avg. Volume: 1,983,075
• 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: 1.48
• Enterprise Value/Revenue: 4.19
• Enterprise Value/Gross Profit: 5.41
• Enterprise Value/Ebitda: 6.17
• 1Y Price Target: $184.89
• Price Target Upside: 29.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 74 Outperform
• Price Target: $160.00 ▲(11.67% Upside)

Diamondback Energy's strong financial performance and attractive valuation are key strengths, supported by positive corporate events. However, technical indicators suggest potential short-term weakness, and there are concerns about cost inflation and market conditions. The company is well-positioned but should focus on improving operational efficiency and managing external risks.

Positive Factors

Asset Management

The potential sale of the Delaware asset could significantly reduce Diamondback's debt, addressing investor concerns.

Financial Performance

FANG reported a solid quarter with a total/oil production beat driving a sizeable free cash flow beat relative to expectations.

Mergers and Acquisitions

Viper's acquisition of Sitio Royalties Corp. is reflected in the updated model.

Negative Factors

Cash Flow

The company's cash flow per share is slightly below consensus due to lower realizations and higher cash taxes.

Debt Management

Investors are focused on asset sales to drive down debt, as management reaffirmed its $1.5 billion target, of which only ~$268.0 million has been executed to date.

Production Activity

The company reduced its activity over the quarter, leading to a decrease in oil production.

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 demonstrates strong revenue and profit growth, with efficient operations and a stable balance sheet. However, the negative free cash flow due to high capital expenditures poses a potential liquidity risk.

Income Statement

Diamondback has shown strong revenue growth with a significant increase from $11.02 billion in 2024 to $12.85 billion in TTM (Trailing-Twelve-Months), reflecting a robust revenue growth rate. The gross profit margin is healthy at 54.0%, and the net profit margin is impressive at 30.9%, indicating efficient cost management and profitability. The EBIT and EBITDA margins are also strong at 38.5% and 69.7%, respectively, showcasing operational efficiency. Overall, the income statement reflects a solid financial performance with strong growth and profitability metrics.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.36, indicating a moderate level of leverage. The return on equity (ROE) is strong at 10.3%, demonstrating effective use of equity to generate profits. The equity ratio is 54.9%, suggesting a solid equity base relative to total assets. While the company maintains a healthy balance sheet, the increase in total debt from $12.43 billion in 2024 to $13.91 billion in TTM should be monitored.

Cash Flow

Diamondback's cash flow statement reveals a mixed picture. The operating cash flow to net income ratio is 1.87, indicating strong cash generation relative to net income. However, the free cash flow has turned negative in TTM at -$4.48 billion, primarily due to high capital expenditures, which could impact liquidity. The free cash flow to net income ratio is negative, highlighting potential cash flow challenges despite strong operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.07B	11.02B	8.34B	9.08B	6.75B	2.81B
Gross Profit	10.90B	4.97B	4.87B	6.78B	4.27B	644.00M
EBITDA	9.55B	7.64B	6.17B	7.24B	4.37B	-4.26B
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	14.00M	13.33B	6.80B	6.38B	6.69B	5.82B
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: Positive
• Last Price: 143.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 143.28 is above the 20-day moving average (MA) of 142.51, above the 50-day MA of 142.20, and below the 200-day MA of 150.33, indicating a neutral trend. The MACD of -0.77 indicates Positive momentum. The RSI at 54.14 is Neutral, neither overbought nor oversold. The STOCH value of 46.88 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
DVN	77 Outperform	$21.51B	7.59	20.60%	3.24%	10.98%	-19.25%
EOG	76 Outperform	$66.13B	11.78	19.63%	3.17%	-5.42%	-20.52%
FANG	74 Outperform	$39.95B	9.81	13.55%	2.72%	51.78%	-27.29%
OXY	71 Outperform	$43.87B	26.18	6.98%	2.01%	-1.66%	-58.96%
EQT	70 Outperform	$32.48B	28.00	6.26%	1.21%	59.12%	12.12%
CTRA	69 Neutral	$17.89B	11.23	11.42%	3.65%	16.56%	20.21%
Sector *	65 Neutral	$15.28B	7.24	3.01%	5.34%	4.27%	-62.52%

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.