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Viper Energy (VNOM)
NASDAQ:VNOM
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Viper Energy
(NASDAQ:VNOM)
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Rating:62Neutral
Price Target:
$48.00
▲(3.34% Upside)
Action:ReiteratedDate:02/25/26
The score is held back mainly by financial risks—2025 net loss and deeply negative free cash flow—despite strong revenue/margins and improved leverage. Support comes from constructive technical trend and a shareholder-return-focused earnings update (dividend increase, buyback expansion, ~1x leverage), while valuation is mixed due to negative earnings despite a high dividend yield.
Positive Factors
Scale via mineral acquisitions
A large, strategic ($8B+) acquisition program that nearly 2.5x'd Permian acreage meaningfully extends reserve life and royalty inventory. Durable scale raises recurring lease/royalty cash flow, improves bargaining leverage with operators, and supports per‑share growth for years.
High margins and revenue rebound
Sustained high operating margins and strong top‑line growth signal a robust underlying business model: royalty/mineral cash flows capture operator economics with low operating cost burden. These margin characteristics support durable cash generation, even if commodity cycles vary.
Balance sheet repair and covered dividend
Reducing leverage to ~1x and signaling dividend coverage at conservative oil assumptions materially improves financial flexibility. Lower leverage plus explicit payout coverage increases durability of shareholder returns and gives room for disciplined buybacks or opportunistic M&A.
Negative Factors
Persistent negative free cash flow
Deep, recurring negative free cash flow (-$1.37B in 2025) indicates capital or working capital drains that operating cash flow hasn't offset. Over months, sustained FCF deficits can force asset sales, higher leverage, or cutbacks to distributions, undermining long‑term payout sustainability.
Earnings volatility and 2025 net loss
A sudden swing from solid profits to a 2025 net loss underscores earnings volatility from below‑the‑line items or one‑offs. Persistent bottom‑line instability complicates forecasting distributable cash, weakens return on equity, and raises execution risk for sustaining growth and payouts.
Permian concentration
Heavy concentration in a single basin concentrates exposure to region‑specific geological, regulatory, and operator cycles. Coupled with a trending lower oil cut (higher gas/NGL mix), this can reduce blended realization and increase sensitivity to basin dynamics over the medium term.
Viper Energy (VNOM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.17B
Dividend Yield6.08%
Average Volume (3M)2.49M
Price to Earnings (P/E)―
Beta (1Y)0.64
Revenue Growth38.38%
EPS Growth3.35%
CountryUS
EmployeesN/A
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.31
Shares Outstanding168,430,980
10 Day Avg. Volume2,987,621
30 Day Avg. Volume2,494,698
Financial Highlights & Ratios
PEG Ratio0.72
Price to Book (P/B)1.24
Price to Sales (P/S)4.09
P/FCF Ratio-4.02
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue12.88
Enterprise Value/Gross Profit26.86
Enterprise Value/Ebitda20.02
Forecast
1Y Price Target
$51.91Price Target Upside11.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)1.36
Revenue Forecast (FY)$1.68B
Viper Energy Business Overview & Revenue Model
Company DescriptionViper Energy Partners LP owns, acquires, and exploits oil and natural gas properties in North America. As of December 31, 2021, it had mineral interests in 27,027 net royalty acres in the Permian Basin and Eagle Ford Shale; and estimated proved oil and natural gas reserves of 127,888 thousand barrels of crude oil equivalent. Viper Energy Partners GP LLC operates as the general partner of the company. The company was founded in 2013 and is based in Midland, Texas. Viper Energy Partners LP is a subsidiary of Diamondback Energy, Inc.
How the Company Makes MoneyViper Energy primarily makes money through its revenue model based on royalties and production from its mineral and leasehold interests. The company earns revenue by leasing its mineral rights to third-party operators who conduct drilling and production activities. These operators pay Viper a percentage of the revenue generated from oil and gas extraction, typically structured as a royalty payment. Additionally, Viper may also benefit from the appreciation of its assets over time. Key revenue streams include oil and gas sales, with the company leveraging its strategic position in the Permian Basin to capitalize on favorable market conditions. Partnerships with leading operators in the region further enhance its earnings potential, as these operators bring expertise and resources to maximize production efficiency and profitability.
Viper Energy Key Performance Indicators (KPIs)
Any
Revenue by Type
Breaks down revenue into oil, gas, NGLs and other streams so you can see what really drives cash flow. The mix shows exposure to different commodity prices and helps explain why revenue moves up or down even when total production is steady.
Breaks down revenue into oil, gas, NGLs and other streams so you can see what really drives cash flow. The mix shows exposure to different commodity prices and helps explain why revenue moves up or down even when total production is steady.
Data provided by:
The Fly
The FlyViper Energy Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call highlights substantial strategic progress: transformative 2025 acquisitions (> $8B), strong per‑share growth (+7% oil production per share), a repaired balance sheet (pro forma net debt ≈ $1.6B, ~1x leverage), a 15% dividend increase and a $1B repurchase authorization. Management emphasizes resilient third‑party activity, strong Diamondback alignment, active leasing and downside hedging. Key risks are limited visibility in the back half of 2026 (wide guidance), a tight market for large M&A at current prices, concentration in the Permian and some shift toward a higher gas/NGL mix (oil cut trending lower). Overall, positive operational and capital allocation momentum outweighs the noted execution and market uncertainties.Q4-2025 Updates
Positive Updates
Large Mineral Acquisitions and Permian Scale Expansion
Completed more than $8.0 billion of mineral acquisitions in 2025, growing Permian Basin acreage by nearly 2.5x year‑over‑year and materially increasing scale, longevity and quality of asset base.
Per Share Production Growth
Oil production per share increased ~7% year‑over‑year; 2026 average daily production guidance implies mid‑single‑digit organic production growth from the Q4 2025 exit rate.
Balance Sheet Repair and Leverage
After a non‑Permian divestiture, fully repaid a $500 million term loan and outstanding revolver; pro forma net debt of roughly $1.6 billion, described as just over one turn of leverage.
Increased and Covered Dividend
Board approved a 15% increase to the base dividend; new base dividend represents approximately 50% of estimated 2026 free cash flow at $50 WTI and management says it is fully covered below $30 WTI.
Expanded Share Repurchase Authorization and Cash Returns
Board approved a $1.0 billion increase to share repurchase authorization; company returned 90% of available cash in Q4 and states it is positioned to return upwards of 100% of cash available for distribution following the divestiture.
Strong Operator Relationships and Third‑Party Activity
Continued strategic alignment with Diamondback; third‑party activity remains resilient despite broader rig count declines, with Viper capturing approximately half of third‑party activity across its acreage.
Lease Bonus and Leasing Momentum
Lease bonus income was strong in 2025, driven by proactive leasing and management of tens of thousands of leases; management believes leasing and deep‑right development (e.g., Spanish Trail/Barnett opportunities) can continue to be a tailwind.
Risk Management and Hedging
Hedge program in place for 2026 focused on downside protection via deferred premium puts; management comfortable with current hedges and emphasized protecting against extreme downside to preserve cash distributions.
Negative Updates
Wide 2026 Production Guidance and Visibility Risk
2026 oil guidance is wide due to limited visibility beyond existing DUCs and permits; management explicitly notes greater confidence in H1 and more uncertainty in the back half of the year if activity/permitting changes.
Slower Market for Large M&A Deals
Management noted difficulty sourcing materially large acquisition opportunities at current price levels; commodity price environment has reduced the number of sizable strategic deals available.
Concentration in the Permian (Limited Geographic Diversification)
Viper is positioned as a Permian‑pure play; while viewed as an advantage for scale and stacked pay exposure, it leaves the company exposed to basin‑specific risks and limits geographic diversification.
Pressure on Oil Cut (Higher Gas/NGL Mix)
Oil cut has trended from mid‑50s to low‑50s percentage points recently (partly driven by added Delaware exposure and improved gas/NGL capture), indicating a higher gas weighting that can affect blended oil realization sensitivity.
Dependence on Operator Activity for Lease Bonus and Development
Lease bonus income and development of deeper zones depend on operator leasing and activity; outcomes are contingent on operators meeting lease requirements, permitting and their execution—limiting Viper's direct control.
Share Repurchase Attractiveness Dependent on Market Price
Management indicated open‑market repurchases were more attractive at lower share prices (e.g., Q4); current higher prices make buybacks less obvious and repurchase pace will be market‑ and price‑dependent.
Limited Near‑Term Large Deal Execution Due to Seller Psychology
Management expects seller mindset to shift only as prices recover; until then, larger strategic deals are harder to complete, which could slow inorganic growth cadence.
Company Guidance
Viper initiated full-year 2026 average daily production guidance that implies mid-single-digit organic production growth from its Q4 2025 exit rate, noting the guide is wide because it only models existing DUCs and permits (conversions historically ~5–6 months) and could skew higher if activity accelerates; the company also reported pro forma net debt of roughly $1.6 billion (just over 1.0x leverage) after fully repaying a $500 million term loan and the revolver, increased the base dividend by 15% (the base dividend is ~50% of estimated 2026 free cash flow at $50 WTI and is fully covered below $30 WTI), expanded the share repurchase authorization by $1.0 billion, returned 90% of available cash in Q4 and said it is positioned to return upwards of 100% of cash available for distribution, and has a 2026 hedge position largely in place using deferred-premium puts with protection through Q3.Viper Energy Financial Statement Overview
Summary
Strong 2025 revenue growth and very high operating margins are positives, and leverage has improved. However, the 2025 swing to a net loss and sharply worsening, persistently negative free cash flow are major concerns that reduce confidence in near-term shareholder return durability.Income Statement
Revenue rebounded strongly in 2025 (+16.7% YoY), and operating profitability remains very high (EBIT margin ~43% and EBITDA margin ~88% in 2025). However, net results were volatile: net income swung from a strong profit in 2024 (net margin ~41.8%) to a loss in 2025 (net margin ~-5.1%), signaling weaker bottom-line conversion and higher non-operating or below-the-line headwinds. Longer-term, results improved meaningfully from the 2020 loss, but the latest year introduces renewed earnings instability.58
Neutral
Balance Sheet
Leverage looks manageable with debt-to-equity improving to ~0.49 in 2025 (down from ~0.64 in 2024 and ~1.07 in 2023), and equity has grown substantially versus prior years. The key weakness is profitability to shareholders turning negative in 2025 (return on equity ~-1.5%) after healthy positive levels in 2022–2024, reflecting the earnings downturn. Overall balance sheet risk appears moderate, but returns and consistency are a watch item.66
Positive
Cash Flow
Cash generation from operations remains solid (operating cash flow $1.05B in 2025, up from ~$620M in 2024), and operating cash flow was strong relative to net income in 2025 as earnings turned negative. The major concern is persistent and worsening free cash flow pressure: free cash flow was negative in 2023–2025 and fell to -$1.37B in 2025 (with a sharp decline in free cash flow growth), indicating heavy cash outflows (e.g., capital intensity, working capital, or other uses) that are not being covered by operating cash flow.42
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.35B | 859.75M | 826.79M | 865.77M | 504.30M |
| Gross Profit | 645.00M | 584.45M | 630.27M | 688.32M | 368.75M |
| EBITDA | 1.19B | 792.20M | 740.80M | 783.42M | 395.23M |
| Net Income | -68.00M | 359.25M | 200.09M | 151.67M | 57.94M |
Balance Sheet | |||||
| Total Assets | 12.67B | 5.07B | 3.97B | 2.92B | 3.03B |
| Cash, Cash Equivalents and Short-Term Investments | 13.00M | 26.85M | 25.87M | 18.18M | 39.45M |
| Total Debt | 2.19B | 1.08B | 1.08B | 576.89M | 776.73M |
| Total Liabilities | 2.31B | 1.16B | 1.12B | 598.85M | 801.19M |
| Stockholders Equity | 4.45B | 1.69B | 1.01B | 690.01M | 814.09M |
Cash Flow | |||||
| Free Cash Flow | -1.37B | -76.63M | -270.17M | 635.66M | 25.94M |
| Operating Cash Flow | 1.05B | 619.61M | 638.19M | 699.80M | 307.11M |
| Investing Cash Flow | -2.42B | -608.57M | -908.37M | 47.57M | -281.18M |
| Financing Cash Flow | 1.36B | -10.05M | 277.86M | -768.64M | -5.61M |
Viper Energy Technical Analysis
Positive
46.45
Price Trends
40.44
Positive
38.89
Positive
38.44
Positive
Market Momentum
1.58
Negative
72.20
Negative
76.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNOM, the sentiment is Positive. The current price of 46.45 is above the 20-day moving average (MA) of 43.74, above the 50-day MA of 40.44, and above the 200-day MA of 38.44, indicating a bullish trend. The MACD of 1.58 indicates Negative momentum. The RSI at 72.20 is Negative, neither overbought nor oversold. The STOCH value of 76.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VNOM.
Viper Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $14.48B | 12.36 | 12.03% | 8.54% | -7.53% | 9.74% | |
75 Outperform | $13.95B | 31.88 | 9.42% | 2.70% | 20.39% | -3.85% | |
74 Outperform | $16.13B | 13.77 | 31.82% | 9.13% | 5.81% | -13.58% | |
73 Outperform | $7.91B | 13.31 | ― | 8.45% | 10.78% | 19.10% | |
66 Neutral | $16.78B | 19.73 | 8.61% | 8.03% | -7.53% | 11.27% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $16.17B | -193.35 | -2.25% | 6.08% | 38.38% | 3.35% |
* Energy Sector Average
VNOM
Viper Energy
46.45
2.50
5.69%
PAA
Plains All American
20.62
1.97
10.55%
WES
Western Midstream Partners
41.17
4.21
11.39%
PAGP
Plains GP Holdings
22.20
2.30
11.56%
HESM
Hess Midstream Partners
38.61
0.12
0.32%
DTM
DT Midstream
138.64
45.47
48.80%
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.