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Viper Energy (VNOM)
NASDAQ:VNOM
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Viper Energy
(NASDAQ:VNOM)
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Rating:69Neutral
Price Target:
$40.00
â–²(6.30% Upside)
Viper Energy's strong financial performance and optimistic earnings call sentiment are the most significant factors driving the score. The stock's attractive valuation further supports its potential, despite weak technical indicators suggesting bearish momentum.
Positive Factors
Revenue Growth
Strong revenue growth indicates expanding operations and effective management of royalty interests, enhancing long-term financial stability.
Oil Production Growth
Projected increase in oil production per share supports sustained revenue growth and strengthens market position in the energy sector.
Capital Return Strategy
Strong capital return strategy enhances shareholder value and reflects confidence in cash flow generation, supporting long-term investment appeal.
Negative Factors
Negative Free Cash Flow
Negative free cash flow indicates potential cash management issues, which could impact the company's ability to fund operations and growth initiatives.
Decline in Return on Equity
Decreasing return on equity suggests reduced profitability relative to shareholder investment, potentially affecting investor confidence.
Tax Implications of Asset Sale
Tax implications from asset sales could reduce available capital for reinvestment and shareholder returns, impacting financial flexibility.
Viper Energy (VNOM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.64B
Dividend Yield6.08%
Average Volume (3M)1.76M
Price to Earnings (P/E)15.7
Beta (1Y)0.63
Revenue Growth38.38%
EPS Growth3.35%
CountryUS
EmployeesN/A
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.40
Shares Outstanding168,430,980
10 Day Avg. Volume1,867,609
30 Day Avg. Volume1,761,989
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)2.73
Price to Sales (P/S)5.40
P/FCF Ratio-60.15
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue12.30
Enterprise Value/Gross Profit22.35
Enterprise Value/Ebitda20.10
Forecast
1Y Price Target
$50.82Price Target Upside35.05% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)1.48
Revenue Forecast (FY)$1.78B
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 Earnings Call Summary
Earnings Call Date:Nov 03, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 23, 2026
Earnings Call Sentiment Positive
The earnings call presented strong growth in oil production and significant shareholder returns as highlights, supported by strategic asset sales and positive third-party activity. However, concerns over market valuation and tax implications of asset sales were noted as lowlights. The overall sentiment leans towards optimism due to the company's growth strategy and shareholder returns.Q3-2025 Updates
Positive Updates
Significant Oil Production Growth
Fourth quarter 2025 oil production guidance implies a roughly 20% increase in oil production per share compared to the same quarter last year. Double-digit year-over-year growth in oil production per share is expected in 2026 relative to 2025.
Strong Return of Capital
Returned 85% of cash available for distribution in the third quarter to stockholders. Combined base plus variable dividend represents a greater than 6% annualized yield, with a 10% increase from last quarter. Over $90 million of share repurchases completed during the quarter.
Non-Permian Asset Sale
Proceeds from the non-Permian asset sale will help achieve a net debt target of $1.5 billion, enabling the return of nearly 100% of cash available for distribution to stockholders.
Positive Third-Party Activity
Captured almost half of all third-party activity across the Permian Basin, with consistent capital deployment by operators outside of Diamondback.
Negative Updates
Tax Implications of Asset Sale
The asset sale will incur a tax hit, reducing net proceeds to about $610 million.
Market Dislocation and Valuation Concerns
Stock buybacks are prioritized due to market dislocation and perceived undervaluation of shares, indicating challenges in market perception.
Company Guidance
During the Viper Energy Third Quarter 2025 earnings call, the company provided guidance indicating a robust growth trajectory, with a projected 20% increase in oil production per share for the fourth quarter compared to the previous year. For 2026, Viper anticipates mid-single-digit organic growth, suggesting double-digit year-over-year growth in oil production per share relative to 2025. Viper's capital return strategy was underscored by an 85% return of cash available for distribution to stockholders in the third quarter, resulting in a 48% increase in return of capital per Class A share from the prior quarter. This was complemented by over $90 million in share repurchases and $60 million retained on the balance sheet. The company also highlighted that, following its non-Permian asset sale, which contributes to reaching a net debt target of $1.5 billion, it intends to return nearly 100% of cash available for distribution to stockholders, primarily through a combined base plus variable dividend yielding over 6% annually.Viper Energy Financial Statement Overview
Summary
Viper Energy demonstrates robust revenue growth and strong operating performance, particularly in terms of gross and EBIT margins. However, the decline in return on equity and negative free cash flow are areas of concern, indicating potential cash flow management issues.Income Statement
Viper Energy shows strong revenue growth with a TTM revenue growth rate of 18.93%. The company maintains healthy profitability margins, with a gross profit margin of 60.76% and an EBIT margin of 60.36% in the TTM period. However, the net profit margin has decreased to 38.25% from 42.09% in the previous year, indicating some pressure on net income.75
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.32 in the TTM period, showing improved leverage compared to previous years. Return on equity is at 16.16%, which is a decline from 21.29% in the previous year, suggesting a decrease in profitability relative to equity. The equity ratio stands at 33.75%, indicating a stable equity position.70
Positive
Cash Flow
Operating cash flow is strong, with an operating cash flow to net income ratio of 3.31 in the TTM period. However, the free cash flow is negative, with a significant decline in free cash flow to net income ratio at -1.63, highlighting potential cash flow challenges despite strong operating cash flow.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.15B | 859.75M | 826.79M | 865.77M | 504.30M | 249.57M |
| Gross Profit | 634.77M | 584.45M | 630.27M | 688.32M | 368.75M | 129.22M |
| EBITDA | 706.06M | 792.20M | 740.80M | 783.42M | 395.23M | 82.55M |
| Net Income | 245.07M | 359.25M | 200.09M | 151.67M | 57.94M | -192.30M |
Balance Sheet | ||||||
| Total Assets | 13.69B | 5.07B | 3.97B | 2.92B | 3.03B | 2.46B |
| Cash, Cash Equivalents and Short-Term Investments | 443.00M | 26.85M | 25.87M | 18.18M | 39.45M | 19.12M |
| Total Debt | 2.62B | 1.08B | 1.08B | 576.89M | 776.73M | 555.64M |
| Total Liabilities | 2.75B | 1.16B | 1.12B | 598.85M | 801.19M | 600.54M |
| Stockholders Equity | 4.62B | 1.69B | 1.01B | 690.01M | 814.09M | 634.45M |
Cash Flow | ||||||
| Free Cash Flow | -3.23B | -76.63M | -270.17M | 635.66M | 25.94M | 130.88M |
| Operating Cash Flow | 811.91M | 619.61M | 638.19M | 699.80M | 307.11M | 196.56M |
| Investing Cash Flow | -2.78B | -608.57M | -908.37M | 47.57M | -281.18M | -16.28M |
| Financing Cash Flow | 2.24B | -10.05M | 277.86M | -768.64M | -5.61M | -164.75M |
Viper Energy Technical Analysis
Positive
37.63
Price Trends
37.82
Positive
37.66
Positive
37.93
Negative
Market Momentum
-0.34
Positive
51.11
Neutral
45.56
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 37.63 is below the 20-day moving average (MA) of 37.84, below the 50-day MA of 37.82, and below the 200-day MA of 37.93, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 51.11 is Neutral, neither overbought nor oversold. The STOCH value of 45.56 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $17.23B | 12.50 | 40.29% | 9.13% | 5.81% | -13.58% | |
79 Outperform | $13.45B | 15.45 | 9.78% | 8.54% | -7.53% | 9.74% | |
78 Outperform | $11.98B | 29.87 | 9.04% | 2.70% | 20.39% | -3.85% | |
77 Outperform | $7.25B | 12.41 | 59.81% | 8.45% | 10.78% | 19.10% | |
72 Outperform | $15.43B | 23.11 | 10.33% | 8.03% | -7.53% | 11.27% | |
69 Neutral | $13.64B | 15.71 | 8.10% | 6.08% | 38.38% | 3.35% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
VNOM
Viper Energy
37.93
-10.14
-21.09%
PAA
Plains All American
19.06
0.51
2.75%
WES
Western Midstream Partners
42.23
5.13
13.83%
PAGP
Plains GP Holdings
20.25
0.39
1.96%
HESM
Hess Midstream Partners
34.93
-2.41
-6.45%
DTM
DT Midstream
117.80
8.94
8.21%
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.