DIAMONDBACK ENERGY INC (FANG) Stock Fundamental Analysis
NASDAQ:FANG - Nasdaq - US25278X1090 - Common Stock - Currency: USD
Taking everything into account, FANG scores 4 out of 10 in our fundamental rating. FANG was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. While FANG is still in line with the averages on profitability rating, there are concerns on its financial health. FANG is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
FANG had positive earnings in the past year.
In the past year FANG had a positive cash flow from operations.
Of the past 5 years FANG 4 years were profitable.
Each year in the past 5 years FANG had a positive operating cash flow.
1.2 Ratios
The Return On Assets of FANG (4.93%) is comparable to the rest of the industry.
FANG has a Return On Equity (8.79%) which is comparable to the rest of the industry.
FANG has a Return On Invested Capital of 6.05%. This is comparable to the rest of the industry: FANG outperforms 42.86% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FANG is significantly below the industry average of 28.64%.
The last Return On Invested Capital (6.05%) for FANG is well below the 3 year average (13.71%), which needs to be investigated, but indicates that FANG had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.93% | ||
| ROE | 8.79% | ||
| ROIC | 6.05% |
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
Looking at the Profit Margin, with a value of 29.97%, FANG belongs to the top of the industry, outperforming 80.30% of the companies in the same industry.
In the last couple of years the Profit Margin of FANG has grown nicely.
With an excellent Operating Margin value of 42.46%, FANG belongs to the best of the industry, outperforming 83.74% 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 71.07%. This is in the better half of the industry: FANG outperforms 78.82% of its industry peers.
In the last couple of years the Gross Margin of FANG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 42.46% | ||
| PM (TTM) | 29.97% | ||
| GM | 71.07% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so FANG is still creating some value.
The number of shares outstanding for FANG has been increased compared to 1 year ago.
The number of shares outstanding for FANG has been increased compared to 5 years ago.
The debt/assets ratio for FANG has been reduced compared to a year ago.
2.2 Solvency
FANG has an Altman-Z score of 1.38. This is a bad value and indicates that FANG is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.38, FANG is in line with its industry, outperforming 46.31% of the companies in the same industry.
FANG has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
FANG has a Debt to Equity ratio (0.32) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.38 |
ROIC/WACC0.75
WACC8.06%
2.3 Liquidity
FANG has a Current Ratio of 0.44. This is a bad value and indicates that FANG is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of FANG (0.44) is worse than 90.64% of its industry peers.
FANG has a Quick Ratio of 0.44. 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 worse Quick ratio (0.41) than 89.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.44 | ||
| Quick Ratio | 0.41 |
3. Growth
3.1 Past
The earnings per share for FANG have decreased strongly by -10.94% in the last year.
The Earnings Per Share has been growing by 19.84% on average over the past years. This is quite good.
FANG shows a strong growth in Revenue. In the last year, the Revenue has grown by 31.55%.
FANG shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.79% yearly.
EPS 1Y (TTM)-10.94%
EPS 3Y12.48%
EPS 5Y19.84%
EPS Q2Q%-23.21%
Revenue 1Y (TTM)31.55%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%66.56%
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 7.33% on average per year.
FANG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.09% yearly.
EPS Next Y0.33%
EPS Next 2Y1.15%
EPS Next 3Y-4.01%
EPS Next 5Y7.33%
Revenue Next Year37.16%
Revenue Next 2Y17.68%
Revenue Next 3Y9.82%
Revenue Next 5Y4.09%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
A Price/Earnings ratio of 9.91 indicates a reasonable valuation of FANG.
Based on the Price/Earnings ratio, FANG is valued a bit cheaper than the industry average as 67.00% of the companies are valued more expensively.
FANG is valuated cheaply when we compare the Price/Earnings ratio to 29.98, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 9.88, the valuation of FANG can be described as reasonable.
67.00% of the companies in the same industry are more expensive than FANG, based on the Price/Forward Earnings ratio.
FANG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.66.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.91 | ||
| Fwd PE | 9.88 |
4.2 Price Multiples
FANG's Enterprise Value to EBITDA ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates FANG does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of FANG may justify a higher PE ratio.
FANG's earnings are expected to decrease with -4.01% in the coming years. This may justify a cheaper valuation.
PEG (NY)29.78
PEG (5Y)0.5
EPS Next 2Y1.15%
EPS Next 3Y-4.01%
5. Dividend
5.1 Amount
FANG has a Yearly Dividend Yield of 2.52%.
Compared to an average industry Dividend Yield of 6.98, FANG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.30, FANG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.52% |
5.2 History
On average, the dividend of FANG grows each year by 95.11%, 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)95.11%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
47.57% of the earnings are spent on dividend by FANG. This is a bit on the high side, but may be sustainable.
The dividend of FANG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP47.57%
EPS Next 2Y1.15%
EPS Next 3Y-4.01%
158.96
+3.37 (+2.17%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners59.82%
Inst Owner Change-0.41%
Ins Owners35.08%
Ins Owner Change0.77%
Market Cap46.41B
Analysts80.54
Price Target217.99 (37.14%)
Short Float %2.12%
Short Ratio1.85
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.52% |
Yearly Dividend8.05
Dividend Growth(5Y)95.11%
DP47.57%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-5.07%
Min EPS beat(2)-16.8%
Max EPS beat(2)6.66%
EPS beat(4)1
Avg EPS beat(4)-3.06%
Min EPS beat(4)-16.8%
Max EPS beat(4)6.66%
EPS beat(8)2
Avg EPS beat(8)-2.48%
EPS beat(12)5
Avg EPS beat(12)-0.17%
EPS beat(16)9
Avg EPS beat(16)2.54%
Revenue beat(2)2
Avg Revenue beat(2)4.67%
Min Revenue beat(2)3.11%
Max Revenue beat(2)6.22%
Revenue beat(4)4
Avg Revenue beat(4)6.32%
Min Revenue beat(4)3.11%
Max Revenue beat(4)11.45%
Revenue beat(8)6
Avg Revenue beat(8)2.89%
Revenue beat(12)9
Avg Revenue beat(12)4.55%
Revenue beat(16)13
Avg Revenue beat(16)8.35%
PT rev (1m)0.34%
PT rev (3m)-1.91%
EPS NQ rev (1m)-1.99%
EPS NQ rev (3m)-2.17%
EPS NY rev (1m)-0.74%
EPS NY rev (3m)-1.89%
Revenue NQ rev (1m)-1.4%
Revenue NQ rev (3m)0.45%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)0.56%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.91 | ||
| Fwd PE | 9.88 | ||
| P/S | 4.19 | ||
| P/FCF | N/A | ||
| P/OCF | 7.24 | ||
| P/B | 1.23 | ||
| P/tB | 1.23 | ||
| EV/EBITDA | 7.85 |
EPS(TTM)16.04
EY10.09%
EPS(NY)16.09
Fwd EY10.12%
FCF(TTM)-18.4
FCFYN/A
OCF(TTM)21.96
OCFY13.82%
SpS37.9
BVpS129.24
TBVpS129.24
PEG (NY)29.78
PEG (5Y)0.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.93% | ||
| ROE | 8.79% | ||
| ROCE | 7.52% | ||
| ROIC | 6.05% | ||
| ROICexc | 6.06% | ||
| ROICexgc | 6.06% | ||
| OM | 42.46% | ||
| PM (TTM) | 29.97% | ||
| GM | 71.07% | ||
| 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-Score5
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.6 | ||
| Cap/Depr | 413.58% | ||
| Cap/Sales | 106.52% | ||
| Interest Coverage | 17.47 | ||
| Cash Conversion | 84.95% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.44 | ||
| Quick Ratio | 0.41 | ||
| Altman-Z | 1.38 |
F-Score5
WACC8.06%
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)-10.94%
EPS 3Y12.48%
EPS 5Y19.84%
EPS Q2Q%-23.21%
EPS Next Y0.33%
EPS Next 2Y1.15%
EPS Next 3Y-4.01%
EPS Next 5Y7.33%
Revenue 1Y (TTM)31.55%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%66.56%
Revenue Next Year37.16%
Revenue Next 2Y17.68%
Revenue Next 3Y9.82%
Revenue Next 5Y4.09%
EBIT growth 1Y2.58%
EBIT growth 3Y4.83%
EBIT growth 5Y25.91%
EBIT Next Year129.93%
EBIT Next 3Y28.61%
EBIT Next 5Y18.86%
FCF growth 1Y-545.6%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y8.33%
OCF growth 3Y17.59%
OCF growth 5Y18.59%