Diamondback (FANG) AI Stock Analysis

• Market Cap: $41.98B
• Dividend Yield: 5.71%
• Average Volume (3M): 2.58M
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.53
• Revenue Growth: 31.55%
• EPS Growth: -9.00%
• Country: US
• Employees: 1,023
• Sector: Energy
• Sector Strength: 57
• Industry: Fossil Fuels
• EPS (TTM): 15.79
• Shares Outstanding: 289,440,900
• 10 Day Avg. Volume: 3,691,479
• 30 Day Avg. Volume: 2,579,871
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.79
• Price to Cash Flow (P/CF): 4.50
• P/FCF Ratio: 0.00
• 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: $210.91
• Price Target Upside: 47.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24

Diamondback Energy shows strong financial management and strategic initiatives, with potential for growth and shareholder returns. However, technical analysis indicates bearish trends, and concerns about infrastructure costs and shareholder dynamics persist. The stock's low valuation and high dividend yield provide a cushion against these challenges.

Positive Factors

Operational Efficiency

Diamondback Energy reported strong operational execution with production exceeding expectations on lower spending, resulting in free cash flow significantly ahead of estimates.

Shareholder Distributions

Higher free cash flows in FY25 could allow for higher shareholder distributions.

Negative Factors

Balance Sheet Leverage

Balance sheet leverage increases, but this is not fully offset by potential asset sales indicated by management.

Diamondback Business Overview & Revenue Model

Company Description

Diamondback Energy, Inc. is an independent oil and natural gas company, which engages in the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves. It operates through the Upstream and Midstream Services segments. The Upstream segment focuses on the Permian Basin operations in West Texas. The Midstream Services segment involves in the Midland and Delaware Basins. The company was founded in December 2007 and is headquartered in Midland, TX.

How the Company Makes Money

Diamondback Energy makes money primarily through the sale of oil, natural gas, and natural gas liquids (NGLs) that it extracts from its operated wells. The company's revenue model is driven by its ability to efficiently produce hydrocarbons from its extensive portfolio of assets in the Permian Basin. Diamondback leverages advanced drilling and completion techniques to enhance production and reduce costs. Key revenue streams include the sale of crude oil, which typically constitutes the largest portion of its revenue, followed by natural gas and NGLs. Additionally, Diamondback may engage in strategic partnerships or joint ventures to enhance its operational capabilities and expand its resource base. The company's earnings are also influenced by commodity price fluctuations, which can impact profitability and cash flow.

Diamondback Financial Statement Overview

Summary

Diamondback demonstrates strong revenue growth and profitability, supported by a solid balance sheet with low leverage. However, the decline in free cash flow and ROE suggests areas for improvement in cash management and return efficiency. Overall, the financials indicate a well-managed company with room for enhancing capital efficiency.

Income Statement

Diamondback exhibits strong profitability with a TTM gross profit margin of 73.76% and a net profit margin of 30.17%. Despite a decline in EBIT and EBITDA margins compared to previous years, the company shows a robust revenue growth rate of 31.51% over the prior year, indicating solid top-line expansion.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.02, indicating prudent leverage management. The equity ratio stands at 56.09%, reflecting a strong capital structure. However, the return on equity has decreased to 8.84%, suggesting a need for improved efficiency in generating returns for shareholders.

Cash Flow

Cash flow metrics highlight potential challenges, with a significant decline in free cash flow due to increased capital expenditures. The operating cash flow to net income ratio remains healthy at 1.92, but the negative free cash flow growth rate signals potential cash management issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.02B	8.41B	9.64B	6.80B	2.81B
	Gross Profit
10.03B	4.87B	6.78B	4.23B	644.00M
	EBIT
4.40B	4.57B	6.51B	4.00B	547.00M
	EBITDA
7.64B	6.17B	7.34B	4.38B	-4.26B
	Net Income Common Stockholders
3.34B	3.14B	4.39B	2.18B	-4.67B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
161.00M	582.00M	157.00M	654.00M	104.00M
	Total Assets
67.29B	29.00B	26.21B	22.90B	17.62B
	Total Debt
900.00M	6.80B	6.25B	6.69B	5.82B
	Net Debt
739.00M	6.22B	6.09B	6.03B	5.71B
	Total Liabilities
27.43B	11.57B	10.52B	9.65B	7.82B
	Stockholders Equity
37.74B	16.63B	15.01B	12.09B	8.79B
Cash Flow		Free Cash Flow
3.55B	1.21B	2.82B	1.65B	74.00M
	Operating Cash Flow
6.41B	5.92B	6.33B	3.94B	2.12B
	Investing Cash Flow
-11.22B	-3.32B	-3.33B	-1.54B	-2.10B
	Financing Cash Flow
4.39B	-2.18B	-3.50B	-1.84B	-37.00M

Diamondback Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 142.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FANG, the sentiment is Negative. The current price of 142.7 is below the 20-day moving average (MA) of 156.02, below the 50-day MA of 163.70, and below the 200-day MA of 180.36, indicating a bearish trend. The MACD of -5.06 indicates Positive momentum. The RSI at 30.30 is Neutral, neither overbought nor oversold. The STOCH value of 11.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FANG.

Diamondback Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COP	78 Outperform	$115.33B	11.61	16.16%	3.44%	-2.57%	-14.01%
DVN	77 Outperform	$22.23B	7.51	21.77%	4.23%	3.00%	-21.63%
EOG	74 Outperform	$67.64B	10.85	22.29%	3.03%	0.88%	-13.66%
APA	68 Neutral	$6.76B	8.15	20.26%	5.38%	17.61%	-75.78%
FANG	64 Neutral	$41.98B	9.34	12.20%	5.71%	31.55%	-9.00%
Sector *	57 Neutral	$8.34B	5.35	-5.98%	7.29%	0.20%	-69.45%

Diamondback Corporate Events

Diamondback Announces Leadership Transition Plan for 2025

On February 20, 2025, Diamondback Energy, Inc. announced a leadership transition plan. Travis D. Stice will step down as CEO at the 2025 Annual Meeting of Stockholders, transitioning to Executive Chairman until 2026. Kaes Van’t Hof will succeed Stice as CEO and join the Board, while Jere W. Thompson III will take over as CFO. The transition is part of a succession plan aimed at ensuring continued long-term performance. Additionally, David L. Houston will retire from the Board. These changes are expected to maintain strategic continuity and support Diamondback’s operational and financial strategies.

Diamondback Energy Enhances Board with Strategic Appointment

On February 3, 2025, Diamondback Energy expanded its Board of Directors by appointing Darin G. Holderness, bringing the total number of directors to 13. Holderness, who brings over 30 years of energy sector experience, including significant roles in oilfield services and exploration companies, was also appointed to the Board’s Audit Committee. This appointment, made in line with a Stockholders Agreement, aims to bolster Diamondback’s strategic positioning in the sector, particularly in the Permian Basin, following the company’s recent merger with Endeavor.