Diamondback (FANG) AI Stock Analysis

• Market Cap: $38.81B
• Dividend Yield: 4.71%
• Average Volume (3M): 2.68M
• Price to Earnings (P/E): 8.1
• Beta (1Y): 0.77
• Revenue Growth: 47.89%
• EPS Growth: -7.75%
• Country: US
• Employees: 1,983
• Sector: Energy
• Sector Strength: 47
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 4.54
• Shares Outstanding: 294,082,950
• 10 Day Avg. Volume: 2,022,761
• 30 Day Avg. Volume: 2,681,858
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 12.36
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $185.58
• Price Target Upside: 36.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24

Diamondback Energy's overall stock score is driven by strong financial performance and attractive valuation, supported by robust profit margins and strategic cost management. However, technical indicators suggest bearish sentiment, and the earnings call highlights potential production declines and cost pressures. Despite these challenges, the company's strategic initiatives and undervalued stock position provide a balanced outlook.

Positive Factors

Capital Efficiency

FANG reported a solid quarter with free cash flow and capital efficiency exceeding expectations.

Financial Performance

Reported adj EBITDA of $2.95B ahead of consensus of $2.78B and Benchmark’s $2.83B.

Market Position

Diamondback Energy is considered a top pick among large cap oil names due to its combination of low WTI breakeven and high free cash flow yield.

Negative Factors

Capital Expenditure

FANG has elected to lower activity this year with a 10% capital expenditure cut in response to macroeconomic headwinds.

Production Guidance

Oil production guidance has been lowered by 3,000 to 5,000 barrels per day, which may impact overall production expectations.

Tariff Impact

FANG's largest drilling input cost, casing, has increased 10% due to steel tariffs.

Diamondback Business Overview & Revenue Model

Company Description

Diamondback Energy, Inc. (FANG) is an independent oil and natural gas company headquartered in Midland, Texas. The company is primarily engaged in the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Diamondback's core operations focus on maximizing hydrocarbon recovery through advanced drilling techniques and efficient resource management.

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, with impressive profit margins and a stable equity position. Despite improvements in leverage, the high debt level and negative free cash flow growth pose challenges. Continued focus on managing capital expenditures and enhancing cash flow stability will be key to sustaining financial health.

Income Statement

Diamondback has demonstrated strong revenue growth with a notable increase of 16.75% in TTM (Trailing-Twelve-Months) compared to the previous year. The gross profit margin stands at an impressive 68.44%, indicating robust cost management. Net profit margin is also strong at 30.88%, reflecting effective operational efficiency. However, a decrease in EBIT margin from 39.89% last year to 25.62% in TTM highlights some pressure on operating income.

Balance Sheet

The company shows a solid equity position with an equity ratio of 54.91% in TTM, suggesting stability. The debt-to-equity ratio has improved, falling to 0.02, indicating reduced leverage risk. Return on equity is strong at 10.33%, showcasing effective utilization of equity capital. However, a high total debt level remains a concern despite recent improvements.

Cash Flow

Free cash flow has declined significantly, leading to a negative growth rate. The operating cash flow to net income ratio is 1.87, suggesting solid cash generation relative to net income. However, negative free cash flow growth and high capital expenditures impact the cash flow stability.

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
4.97B	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
12.43B	6.80B	6.25B	6.69B	5.82B
	Net Debt
12.27B	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: Neutral
• Last Price: 136.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Neutral. The current price of 136.18 is above the 20-day moving average (MA) of 133.05, below the 50-day MA of 142.51, and below the 200-day MA of 167.53, indicating a neutral trend. The MACD of -2.52 indicates Negative momentum. The RSI at 49.23 is Neutral, neither overbought nor oversold. The STOCH value of 37.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FANG.

Diamondback Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EOG	81 Outperform	$60.51B	10.29	20.90%	3.47%	-0.23%	-14.82%
FANG	75 Outperform	$38.81B	8.14	14.26%	4.71%	47.89%	-7.75%
DVN	73 Outperform	$19.68B	6.72	20.88%	4.13%	13.25%	-16.37%
OXY	72 Outperform	$38.16B	16.61	9.43%	2.29%	-4.35%	-37.69%
MPC	69 Neutral	$44.10B	14.02	12.37%	2.40%	-6.39%	-64.50%
OVV	63 Neutral	$9.02B	8.18	6.17%	3.46%	-14.46%	-67.20%
Sector *	56 Neutral	$6.93B	3.23	-4.86%	5.94%	0.12%	-48.32%

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.