Diamondback Energy, Inc.
Diamondback Energy, Inc. Fundamental Analysis
Diamondback Energy, Inc. (FANG) shows strong financial fundamentals with a PE ratio of 12.19, profit margin of 27.42%, and ROE of 10.89%. The company generates $15.1B in annual revenue with strong year-over-year growth of 32.19%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 67.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze FANG's fundamental strength across five key dimensions:
Efficiency Score
WeakFANG struggles to generate sufficient returns from assets.
Valuation Score
ModerateFANG shows balanced valuation metrics.
Growth Score
ModerateFANG shows steady but slowing expansion.
Financial Health Score
ModerateFANG shows balanced financial health with some risks.
Profitability Score
ModerateFANG maintains healthy but balanced margins.
Key Financial Metrics
Is FANG Expensive or Cheap?
P/E Ratio
FANG trades at 12.19 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, FANG's PEG of 5.53 indicates potential overvaluation.
Price to Book
The market values Diamondback Energy, Inc. at 1.31 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 3.19 times EBITDA. This is generally considered low.
How Well Does FANG Make Money?
Net Profit Margin
For every $100 in sales, Diamondback Energy, Inc. keeps $27.42 as profit after all expenses.
Operating Margin
Core operations generate 35.68 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.89 in profit for every $100 of shareholder equity.
ROA
Diamondback Energy, Inc. generates $5.51 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Diamondback Energy, Inc. generates strong operating cash flow of $8.65B, reflecting robust business health.
Free Cash Flow
Diamondback Energy, Inc. generates weak or negative free cash flow of $436.42M, restricting financial flexibility.
FCF Per Share
Each share generates $1.52 in free cash annually.
FCF Yield
FANG converts 0.88% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.19
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.53
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.31
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.30
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.42
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.62
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How FANG Stacks Against Its Sector Peers
| Metric | FANG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.19 | 20.19 | Better (Cheaper) |
| ROE | 10.89% | 1019.00% | Weak |
| Net Margin | 27.42% | -44017.00% (disorted) | Strong |
| Debt/Equity | 0.42 | -0.65 (disorted) | Distorted |
| Current Ratio | 0.62 | 4.60 | Weak Liquidity |
| ROA | 5.51% | -11655350.00% (disorted) | Weak |
FANG outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Diamondback Energy, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
112.90%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
964.84%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
79.26%
Industry Style: Cyclical, Value, Commodity
High Growth