Viper Energy (VNOM) AI Stock Analysis

• Market Cap: $8.96B
• Dividend Yield: 5.8%
• Average Volume (3M): 2.39M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.59
• Revenue Growth: 19.03%
• EPS Growth: 36.16%
• Country: US
• Employees: N/A
• Sector: Energy
• Sector Strength: 57
• Industry: Fossil Fuels
• EPS (TTM): 3.67
• Shares Outstanding: 131,313,140
• 10 Day Avg. Volume: 2,147,036
• 30 Day Avg. Volume: 2,393,318
• PEG Ratio: 0.30
• Price to Book (P/B): N/A
• Price to Sales (P/S): 10.54
• Price to Cash Flow (P/CF): 14.40
• P/FCF Ratio: 14.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $60.33
• Price Target Upside: 45.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Viper Energy's strong financial health and strategic acquisitions are key strengths, supporting a positive outlook. While technical indicators show bearish momentum, the company's reasonable valuation and attractive dividend yield provide a solid investment case. Positive earnings guidance further enhances the stock's prospects despite market volatility concerns.

Positive Factors

Acquisition

The acquisition of Endeavor and Quinn Ranch royalties provides transformative scale for Viper Energy.

Financial Performance

Viper's market cap has surpassed the $10 billion threshold, elevating it from small to mid-cap E&Ps.

Negative Factors

Transaction Cost

The absolute value of the deal was higher than estimated, resulting in a more expensive transaction and a lowered price objective.

Viper Energy Business Overview & Revenue Model

Company Description

Viper Energy Partners LP (VNOM) is a publicly traded partnership headquartered in Midland, Texas, operating within the energy sector. The company specializes in owning, acquiring, and managing mineral interests and royalties in oil and natural gas properties, primarily located in the prolific Permian Basin. By investing in these mineral rights, Viper Energy benefits from the production revenue generated by third-party operators, allowing it to capitalize on the extensive oil and gas exploration and production activities in this region.

How the Company Makes Money

Viper Energy generates revenue primarily through its ownership of mineral rights and royalty interests in oil and natural gas properties. The company earns money by receiving a percentage of the revenue from the sale of oil and gas extracted by operators who develop and produce on the land where Viper holds these interests. Key revenue streams include lease bonuses, which are upfront payments received when mineral rights are leased to operators, and ongoing royalty payments based on the production volume and commodity prices. Viper Energy's earnings are significantly influenced by factors such as production levels, market prices for oil and gas, and strategic acquisitions of additional mineral interests. The company also benefits from partnerships with major oil and gas operators who have the expertise and resources to efficiently extract hydrocarbons from its properties.

Viper Energy Financial Statement Overview

Summary

Viper Energy shows strong financial health with high profitability margins and a robust balance sheet characterized by no debt. The cash flow situation is positive, with significant free cash flow improvements despite the decline in revenue growth.

Income Statement

Viper Energy shows a strong income statement with robust gross and net profit margins in the TTM. The gross profit margin is approximately 66.5% and net profit margin is 57.1%, indicating efficient cost management. However, the revenue has decreased from 2023 to TTM by 23.9%, which is a concern. The company maintains a strong EBIT margin of 67.1% and EBITDA margin of 91.9% in the TTM.

Balance Sheet

The balance sheet reveals a strong equity position with a debt-to-equity ratio of 0, reflecting no debt in the TTM. The return on equity is impressive at 21.3%, indicating effective utilization of shareholders' equity. The equity ratio stands at 33.3%, showing a healthy balance between debt and equity.

Cash Flow

Cash flow analysis indicates a positive trajectory with free cash flow improving significantly to $348.6 million in TTM from a negative position in 2023. The operating cash flow to net income ratio is 1.7, reflecting good cash generation relative to net income. The free cash flow to net income ratio is 0.97, suggesting efficient conversion of profits into free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
859.75M	826.79M	865.77M	504.30M	249.57M
	Gross Profit
798.87M	630.27M	688.32M	368.75M	129.22M
	EBIT
566.40M	620.22M	680.48M	361.57M	123.40M
	EBITDA
792.20M	742.32M	783.41M	395.15M	82.55M
	Net Income Common Stockholders
359.25M	200.09M	655.00M	256.68M	-193.41M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
26.85M	25.87M	18.18M	39.45M	19.12M
	Total Assets
5.07B	3.97B	2.92B	3.03B	2.46B
	Total Debt
1.08B	1.08B	576.89M	776.73M	555.64M
	Net Debt
1.06B	1.06B	558.72M	737.28M	536.52M
	Total Liabilities
1.16B	1.12B	598.85M	801.19M	600.54M
	Stockholders Equity
1.69B	1.01B	690.66M	814.82M	635.25M
Cash Flow		Free Cash Flow
619.61M	-270.17M	636.87M	25.94M	130.88M
	Operating Cash Flow
619.61M	638.19M	699.80M	307.11M	196.56M
	Investing Cash Flow
-608.57M	-908.37M	47.57M	-281.18M	-16.28M
	Financing Cash Flow
-10.05M	277.86M	-768.64M	-5.61M	-164.75M

Viper Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 41.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNOM, the sentiment is Negative. The current price of 41.36 is below the 20-day moving average (MA) of 46.60, below the 50-day MA of 47.63, and below the 200-day MA of 45.24, indicating a bearish trend. The MACD of -1.67 indicates Positive momentum. The RSI at 28.32 is Positive, neither overbought nor oversold. The STOCH value of 5.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VNOM.

Viper Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VNOM	77 Outperform	$8.96B	10.83	26.55%	5.80%	19.03%	36.16%
BSM	73 Outperform	$3.11B	12.86	23.12%	10.17%	-12.71%	-39.85%
KRP	64 Neutral	$2.68B	45.09	1.48%	12.94%	13.72%	-110.82%
DMLP	62 Neutral	$1.43B	14.14	32.48%	10.67%	-1.39%	-23.38%
Sector *	57 Neutral	$8.34B	5.35	-5.98%	7.29%	0.20%	-69.45%

Viper Energy Corporate Events

Viper Energy Announces Leadership Transition with New CEO

On February 20, 2025, Viper Energy, Inc. announced a leadership transition with the immediate departure of Travis D. Stice from the CEO role, while he remains on the Board of Directors. Kaes Van’t Hof, previously President, has taken over as CEO, and Austen Gilfillian has been promoted to President. This restructuring is part of a strategic succession planning process aimed at fostering long-term growth and maintaining Viper’s leadership in the mineral and royalties market. The changes are designed to ensure continued outperformance and capitalize on Viper’s unique business model and strategic relationship with Diamondback Energy.

Viper Energy Announces Upsized Public Equity Offering

On January 30, 2025, Viper Energy, Inc. entered into an Underwriting Agreement for a public equity offering, issuing a total of 28,336,000 shares of Class A common stock, generating approximately $1.2 billion in net proceeds. This capital is intended to fund a pending acquisition of subsidiaries from its parent, Diamondback Energy, Inc., or for general corporate purposes if the acquisition does not close. The Offering, priced at $44.50 per share, was upsized from an originally proposed 22,000,000 shares to 24,640,000 shares, with underwriters fully exercising their option to purchase additional shares.

Viper Energy’s Strategic Acquisitions for Growth in 2025

On January 30, 2025, Viper Energy announced a significant acquisition agreement with Endeavor Energy Resources to acquire mineral and royalty interests in the Permian Basin for $1 billion in cash and equity. This transaction, along with the acquisition of interests from Morita Ranches Minerals LLC for $211 million, aims to enhance Viper’s alignment with Diamondback’s development plans and is expected to be immediately accretive to financial metrics, reducing leverage and positioning Viper for continued growth. The acquisitions are subject to customary closing conditions and are expected to close in the first half of 2025, with Viper funding the cash portions through a combination of cash on hand, borrowings, and capital markets transactions.