Diamondback (FANG) AI Stock Analysis

• Market Cap: $42.75B
• Dividend Yield: 2.73%
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.70
• Revenue Growth: 60.29%
• EPS Growth: -17.62%
• Country: US
• Employees: 1,983
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 3.08
• Shares Outstanding: 286,525,600
• 10 Day Avg. Volume: 1,747,790
• 30 Day Avg. Volume: 1,706,173
• PEG Ratio: -1.00
• Price to Book (P/B): 0.93
• Price to Sales (P/S): 3.17
• P/FCF Ratio: -6.51
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 4.15
• Enterprise Value/Gross Profit: 10.67
• Enterprise Value/Ebitda: 5.89
• 1Y Price Target: $181.18
• Price Target Upside: 21.43% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 23
• EPS Forecast (FY): 12.97
• Revenue Forecast (FY): $14.07B

• Rating: 74 Outperform
• Price Target: $156.00 ▲(4.56% Upside)

Diamondback Energy's strong financial performance and strategic initiatives, as highlighted in the earnings call, are key strengths. However, technical indicators suggest bearish momentum, and challenges in free cash flow generation pose risks. The stock's valuation is attractive, providing potential upside, but market uncertainties and oil price vulnerabilities remain concerns.

Positive Factors

Operational Efficiency

Enhanced operational efficiencies, such as continuous pumping and improved drilling techniques, lower costs and increase profitability, providing a durable competitive advantage in the oil and gas sector.

Strategic Asset Sales

Selling non-core assets at favorable valuations strengthens the balance sheet, providing financial flexibility and focusing resources on core operations, which is beneficial for long-term growth.

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, positioning Diamondback well for sustained long-term performance in the competitive oil and gas industry.

Negative Factors

Free Cash Flow Challenges

Declining free cash flow suggests potential cash management issues, which could limit Diamondback's ability to invest in growth opportunities and maintain financial flexibility over the long term.

Oil Price Vulnerability

Dependence on oil prices creates vulnerability to market fluctuations, which can impact profitability and necessitate adjustments in capital expenditure plans, affecting long-term strategic initiatives.

High Exposure to Waha Pricing

High exposure to Waha pricing increases risk from regional price volatility, potentially impacting revenue stability and necessitating strategic adjustments to mitigate long-term financial risk.

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 financial health with robust revenue growth and profitability margins. The balance sheet is stable with low leverage, enhancing financial flexibility. However, the decline in free cash flow is a concern, indicating potential cash management challenges. Overall, the company is well-positioned in its industry but should focus on improving free cash flow generation to sustain long-term growth.

Income Statement

Diamondback has demonstrated strong revenue growth with a 9.19% increase in TTM, supported by robust gross and net profit margins of 79.10% and 27.34% respectively. The EBIT and EBITDA margins are also healthy at 29.49% and 67.69%, indicating efficient operations and profitability. However, the net profit margin has slightly decreased compared to the previous year, suggesting some pressure on net earnings.

Balance Sheet

The company's balance sheet is solid with a low debt-to-equity ratio of 0.01, reflecting minimal leverage and financial risk. The return on equity is decent at 10.89%, indicating effective use of equity capital. The equity ratio stands at 51.27%, suggesting a strong equity base relative to total assets. However, the ROE has decreased from previous years, indicating a potential decline in profitability efficiency.

Cash Flow

Operating cash flow is strong, covering net income by over 2 times, which indicates good cash generation from operations. However, free cash flow has significantly declined, with a negative growth rate of -105.24%, and the free cash flow to net income ratio is low at 5.05%. This suggests potential challenges in generating free cash flow, possibly due to high capital expenditures or other cash outflows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.30B	11.02B	8.34B	9.57B	6.75B	2.81B
Gross Profit	5.96B	4.97B	4.80B	6.70B	4.27B	637.00M
EBITDA	10.78B	7.64B	6.17B	7.23B	4.37B	-4.27B
Net Income	4.20B	3.34B	3.14B	4.39B	2.18B	-4.52B
Balance Sheet
Total Assets	76.21B	67.29B	29.00B	26.21B	22.90B	17.62B
Cash, Cash Equivalents and Short-Term Investments	159.00M	161.00M	582.00M	157.00M	654.00M	104.00M
Total Debt	16.24B	12.43B	6.80B	6.38B	6.77B	5.93B
Total Liabilities	30.58B	27.43B	11.57B	10.52B	9.65B	7.82B
Stockholders Equity	39.09B	37.74B	16.63B	15.01B	12.09B	8.79B
Cash Flow
Free Cash Flow	442.00M	-5.37B	1.21B	2.71B	1.67B	74.00M
Operating Cash Flow	8.76B	6.41B	5.92B	6.33B	3.94B	2.12B
Investing Cash Flow	-9.55B	-11.22B	-3.32B	-3.33B	-1.54B	-2.10B
Financing Cash Flow	969.00M	4.39B	-2.18B	-3.50B	-1.84B	-37.00M

Diamondback Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 149.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 149.2 is above the 20-day moving average (MA) of 142.81, above the 50-day MA of 141.78, and above the 200-day MA of 141.81, indicating a bullish trend. The MACD of 1.18 indicates Negative momentum. The RSI at 55.79 is Neutral, neither overbought nor oversold. The STOCH value of 74.34 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	81 Outperform	$37.38B	20.44	8.19%	1.06%	64.84%	219.47%
EOG	74 Outperform	$59.90B	10.99	18.48%	3.74%	-5.15%	-19.06%
FANG	74 Outperform	$42.75B	10.37	10.92%	2.73%	60.29%	-17.62%
CTRA	73 Outperform	$20.05B	12.15	11.86%	3.34%	26.13%	31.42%
DVN	72 Outperform	$22.48B	8.43	18.35%	2.91%	11.14%	-21.32%
OXY	67 Neutral	$42.13B	31.12	5.82%	2.36%	-2.48%	-65.26%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Diamondback Corporate Events

Diamondback Energy Reports Strong Q3 2025 Results

Diamondback Energy, Inc. is an independent oil and natural gas company based in Midland, Texas, specializing in the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin.

Diamondback Energy’s Earnings Call Highlights Strategic Wins

Diamondback Energy’s recent earnings call conveyed a positive sentiment, underscored by strong operational efficiencies, strategic asset sales, and a steadfast commitment to shareholder returns. However, the company acknowledged concerns regarding market uncertainties and vulnerabilities related to oil prices, which could impact future performance.

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.