Diamondback Energy, Inc. (FANG) stock analysis

P/E above its 5-year median

Diamondback Energy's P/E of 24.7 is above its own 5-year median of 10.0.

P/E above the industry

Diamondback Energy's P/E of 24.7 is above the Crude Petroleum and Natural Gas median of 10.4.

EV/EBITDA above its 5-year median

Diamondback Energy's EV/EBITDA of 9.1 is above its 5-year median of 6.4.

P/B below the industry

Diamondback Energy's price-to-book of 1.30 is below the Crude Petroleum and Natural Gas median of 1.33.

Trading above fair value

The share price of $180.98 is above our fair value estimate of $135.75.

Margin of safety under 20%

The price is 33.3% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 15.9% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -38.5% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 21.1% over the last twelve months; the Crude Petroleum and Natural Gas median is 8.7%.

Guidance raised

Diamondback Energy raised its 2026 Operated drilling and completion outlook on Nov 2, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 5.3% over the last twelve months and averaged 18.0% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 3.5%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Diamondback Energy's return on equity of 5.3% is below the Crude Petroleum and Natural Gas median of 5.5%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 11.0% over the last twelve months, against a 5-year average of 31.2%.

Net margin above the industry

Diamondback Energy's net margin of 11.0% is above the Crude Petroleum and Natural Gas median of 3.8%.

Low debt

Debt is 34.0% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 66.1% five years ago to 34.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 78.3% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets don't cover short-term debts

Current assets are 0.55 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.59; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Diamondback Energy paid dividends worth 3.0% of the share price over the last twelve months.

Yield below Treasuries

The 3.0% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Diamondback Energy yields 3.0%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 9 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.