DIAMONDBACK ENERGY INC (FANG) Stock Fundamental Analysis
NASDAQ:FANG - Nasdaq - US25278X1090 - Common Stock - Currency: USD
Taking everything into account, FANG scores 5 out of 10 in our fundamental rating. FANG was compared to 211 industry peers in the Oil, Gas & Consumable Fuels industry. While FANG has a great profitability rating, there are quite some concerns on its financial health. FANG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year FANG was profitable.
FANG had a positive operating cash flow in the past year.
Of the past 5 years FANG 4 years were profitable.
FANG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FANG has a Return On Assets of 5.64%. This is in the better half of the industry: FANG outperforms 63.98% of its industry peers.
FANG has a Return On Equity of 10.27%. This is in the better half of the industry: FANG outperforms 60.19% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.50%, FANG is in line with its industry, outperforming 56.87% of the companies in the same industry.
FANG had an Average Return On Invested Capital over the past 3 years of 13.71%. This is significantly below the industry average of 23.79%.
The 3 year average ROIC (13.71%) for FANG is well above the current ROIC(6.50%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.64% | ||
| ROE | 10.27% | ||
| ROIC | 6.5% |
ROA(3y)10.76%
ROA(5y)3.23%
ROE(3y)18.84%
ROE(5y)4.64%
ROIC(3y)13.71%
ROIC(5y)11.82%
1.3 Margins
FANG's Profit Margin of 30.67% is amongst the best of the industry. FANG outperforms 82.94% of its industry peers.
FANG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 40.96%, FANG belongs to the top of the industry, outperforming 85.78% of the companies in the same industry.
In the last couple of years the Operating Margin of FANG has grown nicely.
FANG has a Gross Margin of 70.81%. This is amongst the best in the industry. FANG outperforms 81.04% of its industry peers.
In the last couple of years the Gross Margin of FANG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 40.96% | ||
| PM (TTM) | 30.67% | ||
| GM | 70.81% |
OM growth 3Y-10.89%
OM growth 5Y2.54%
PM growth 3Y-2.26%
PM growth 5Y37.7%
GM growth 3Y-4.27%
GM growth 5Y-1.55%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), FANG is creating some value.
FANG has more shares outstanding than it did 1 year ago.
FANG has more shares outstanding than it did 5 years ago.
FANG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.32, we must say that FANG is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of FANG (1.32) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.34 indicates that FANG is not too dependend on debt financing.
FANG has a Debt to Equity ratio (0.34) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.32 |
ROIC/WACC0.75
WACC8.67%
2.3 Liquidity
A Current Ratio of 0.86 indicates that FANG may have some problems paying its short term obligations.
FANG's Current ratio of 0.86 is on the low side compared to the rest of the industry. FANG is outperformed by 65.40% of its industry peers.
FANG has a Quick Ratio of 0.86. This is a bad value and indicates that FANG is not financially healthy enough and could expect problems in meeting its short term obligations.
FANG has a Quick ratio (0.83) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
The earnings per share for FANG have decreased strongly by -12.66% in the last year.
The Earnings Per Share has been growing by 19.84% on average over the past years. This is quite good.
Looking at the last year, FANG shows a very strong growth in Revenue. The Revenue has grown by 47.89%.
Measured over the past years, FANG shows a very strong growth in Revenue. The Revenue has been growing by 22.79% on average per year.
EPS 1Y (TTM)-12.66%
EPS 3Y12.48%
EPS 5Y19.84%
EPS Q2Q%0.89%
Revenue 1Y (TTM)47.89%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%81.77%
3.2 Future
Based on estimates for the next years, FANG will show a small growth in Earnings Per Share. The EPS will grow by 0.86% on average per year.
The Revenue is expected to grow by 8.61% on average over the next years. This is quite good.
EPS Next Y-14.12%
EPS Next 2Y-9.69%
EPS Next 3Y0.09%
EPS Next 5Y0.86%
Revenue Next Year33.45%
Revenue Next 2Y14.53%
Revenue Next 3Y11.39%
Revenue Next 5Y8.61%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.98, which indicates a very decent valuation of FANG.
76.30% of the companies in the same industry are more expensive than FANG, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of FANG to the average of the S&P500 Index (27.30), we can say FANG is valued rather cheaply.
A Price/Forward Earnings ratio of 11.03 indicates a reasonable valuation of FANG.
Based on the Price/Forward Earnings ratio, FANG is valued a bit cheaper than the industry average as 62.56% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, FANG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.98 | ||
| Fwd PE | 11.03 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FANG is valued a bit cheaper than the industry average as 64.93% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.15 |
4.3 Compensation for Growth
The decent profitability rating of FANG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.45
EPS Next 2Y-9.69%
EPS Next 3Y0.09%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.84%, FANG has a reasonable but not impressive dividend return.
FANG's Dividend Yield is comparable with the industry average which is at 6.51.
FANG's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
5.2 History
On average, the dividend of FANG grows each year by 57.49%, which is quite nice.
FANG has been paying a dividend for over 5 years, so it has already some track record.
The dividend of FANG decreased recently.
Dividend Growth(5Y)57.49%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
33.39% of the earnings are spent on dividend by FANG. This is a low number and sustainable payout ratio.
FANG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP33.39%
EPS Next 2Y-9.69%
EPS Next 3Y0.09%
144.33
+1.3 (+0.91%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners60.03%
Inst Owner Change-0.01%
Ins Owners35.52%
Ins Owner Change5.88%
Market Cap42.17B
Analysts84.32
Price Target188.21 (30.4%)
Short Float %3.64%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
Yearly Dividend6.72
Dividend Growth(5Y)57.49%
DP33.39%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.22%
Min EPS beat(2)6.66%
Max EPS beat(2)7.78%
EPS beat(4)2
Avg EPS beat(4)-1.05%
Min EPS beat(4)-16.8%
Max EPS beat(4)7.78%
EPS beat(8)3
Avg EPS beat(8)-0.61%
EPS beat(12)5
Avg EPS beat(12)-0.58%
EPS beat(16)9
Avg EPS beat(16)1.42%
Revenue beat(2)2
Avg Revenue beat(2)4.78%
Min Revenue beat(2)3.11%
Max Revenue beat(2)6.44%
Revenue beat(4)4
Avg Revenue beat(4)6.81%
Min Revenue beat(4)3.11%
Max Revenue beat(4)11.45%
Revenue beat(8)7
Avg Revenue beat(8)4.24%
Revenue beat(12)9
Avg Revenue beat(12)3.1%
Revenue beat(16)13
Avg Revenue beat(16)7.8%
PT rev (1m)-2.32%
PT rev (3m)-11.09%
EPS NQ rev (1m)0.44%
EPS NQ rev (3m)-19.47%
EPS NY rev (1m)-4.44%
EPS NY rev (3m)-11.83%
Revenue NQ rev (1m)-1.66%
Revenue NQ rev (3m)-8.01%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-4.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.98 | ||
| Fwd PE | 11.03 | ||
| P/S | 3.27 | ||
| P/FCF | N/A | ||
| P/OCF | 5.67 | ||
| P/B | 1.1 | ||
| P/tB | 1.1 | ||
| EV/EBITDA | 6.15 |
EPS(TTM)16.08
EY11.14%
EPS(NY)13.08
Fwd EY9.06%
FCF(TTM)-18.08
FCFYN/A
OCF(TTM)25.44
OCFY17.63%
SpS44.11
BVpS131.68
TBVpS131.68
PEG (NY)N/A
PEG (5Y)0.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.64% | ||
| ROE | 10.27% | ||
| ROCE | 8.08% | ||
| ROIC | 6.5% | ||
| ROICexc | 6.68% | ||
| ROICexgc | 6.68% | ||
| OM | 40.96% | ||
| PM (TTM) | 30.67% | ||
| GM | 70.81% | ||
| FCFM | N/A |
ROA(3y)10.76%
ROA(5y)3.23%
ROE(3y)18.84%
ROE(5y)4.64%
ROIC(3y)13.71%
ROIC(5y)11.82%
ROICexc(3y)13.87%
ROICexc(5y)12.01%
ROICexgc(3y)13.87%
ROICexgc(5y)12.01%
ROCE(3y)17.06%
ROCE(5y)14.7%
ROICexcg growth 3Y-27.28%
ROICexcg growth 5Y2.37%
ROICexc growth 3Y-27.28%
ROICexc growth 5Y2.37%
OM growth 3Y-10.89%
OM growth 5Y2.54%
PM growth 3Y-2.26%
PM growth 5Y37.7%
GM growth 3Y-4.27%
GM growth 5Y-1.55%
F-Score4
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.48 | ||
| Cap/Depr | 365.64% | ||
| Cap/Sales | 98.68% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.89% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 1.32 |
F-Score4
WACC8.67%
ROIC/WACC0.75
Cap/Depr(3y)314.79%
Cap/Depr(5y)256.28%
Cap/Sales(3y)66.3%
Cap/Sales(5y)61.08%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-12.66%
EPS 3Y12.48%
EPS 5Y19.84%
EPS Q2Q%0.89%
EPS Next Y-14.12%
EPS Next 2Y-9.69%
EPS Next 3Y0.09%
EPS Next 5Y0.86%
Revenue 1Y (TTM)47.89%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%81.77%
Revenue Next Year33.45%
Revenue Next 2Y14.53%
Revenue Next 3Y11.39%
Revenue Next 5Y8.61%
EBIT growth 1Y12.85%
EBIT growth 3Y4.83%
EBIT growth 5Y25.91%
EBIT Next Year118.21%
EBIT Next 3Y32.15%
EBIT Next 5Y19.39%
FCF growth 1Y-341.34%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y14.4%
OCF growth 3Y17.59%
OCF growth 5Y18.59%