Diamondback Energy, Inc. (FANG) Stock Analysis
Diamondback Energy, Inc. (FANG) Stock Analysis
Analysis from 10-Q filed 2025-11-05. Data as of Q4 2025.
Overall Grade: F (Concerning)
Diamondback Energy, Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 1.6% | Below expectations |
| FCF Margin | 58.3% | Strong cash generation |
| Debt/Equity | 0.4x | Conservative leverage |
Investment Thesis: Healthy free cash flow margin of 58.3% provides financial flexibility for growth and shareholder returns.
Explore Diamondback Energy, Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Diamondback Energy, Inc. earns 1.6% ROIC, Bottom 50% in Energy
Diamondback Energy, Inc.'s trailing-twelve-month ROIC of 1.6% ranks Bottom 50% in Energy companies (sector median: 6.9%), driven by NOPAT margin of 7.0% combined with asset turnover of 0.2x. Source: 10-Q filed 2025-11-05.
| Metric | FANG | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 1.6% | Red flag | Below sector median of 6.9% |
| Return on Equity (ROE) | 4.3% | Warning | Moderate equity returns |
| Operating Margin | 8.4% | Adequate | Moderate operational efficiency |
Cash Flow: Diamondback Energy, Inc. generates $8.8B FCF at 58.3% margin, positive NaN/8 quarters
Diamondback Energy, Inc. generated $8.8B in free cash flow (TTM), a 58.3% FCF margin, a margin that ranks Top 25% in Energy. Operating cash flow exceeds net income by 5.3x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-05.
| Metric | FANG | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 58.3% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $8.8B | Good | Positive cash generation |
| OCF/Net Income | 5.3x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Diamondback Energy, Inc. at 0.4x leverage
Diamondback Energy, Inc.'s debt-to-equity ratio of 0.4x reflects moderate leverage. Total debt of $14.5B offset by $106.0M in cash. Source: 10-Q filed 2025-11-05.
| Metric | FANG | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.4x | Good | Conservative capital structure |
| Net Cash Position | $-14.4B | Warning | Net debt position |
Valuation: Diamondback Energy, Inc. trades at 26.2x earnings
Diamondback Energy, Inc. trades at a P/E of 26.2x. Free cash flow yield of 20.2% offers attractive cash returns relative to price.
| Metric | FANG | Rating | Context |
|---|---|---|---|
| P/E Ratio | 26.2x | Adequate | Premium valuation |
| EV/Sales | 3.8x | Good | Growth premium priced in |
| FCF Yield | 20.2% | Excellent | Attractive cash return |
| Dividend Yield | 2.7% | Adequate | Growth focus over income |
Capital Allocation: Diamondback Energy, Inc. returns 3.4% shareholder yield
Diamondback Energy, Inc.'s total shareholder yield is 3.4% (dividends 2.7% + buybacks 0.7%). Source: 10-Q filed 2025-11-05.
| Metric | FANG | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 3.4% | Good | Dividend + buyback yield combined |
| Buyback Yield | 0.7% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $1.5B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 1.6% | Bottom 50% | 0.2x below |
| Free Cash Flow Margin | 58.3% | Top 25% | 6.6x above |
| Operating Margin | 8.4% | Bottom 50% | 0.9x below |
| Return on Equity (ROE) | 4.3% | Bottom 50% | 0.5x below |
| P/E Ratio | 26.2x | N/A | - |
Financial Scorecard
| Metric | FANG | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 1.6% | Red flag | Bottom 50% of sector (median: 6.9%) |
| Free Cash Flow Margin | 58.3% | Excellent | Top 25% of sector (median: 8.8%) |
| Debt to Equity Ratio | 39.2% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 26.2x | Adequate | Growth premium |
| Free Cash Flow Yield | 20.2% | Excellent | High cash return |
Frequently Asked Questions
Q: What is Diamondback Energy, Inc.'s Return on Invested Capital (ROIC)?
Diamondback Energy, Inc. (FANG) has a trailing twelve-month Return on Invested Capital (ROIC) of 1.6%. This compares below the sector median of 6.9%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Diamondback Energy, Inc.'s Free Cash Flow Margin?
Diamondback Energy, Inc. (FANG) has a free cash flow margin of 58.3%, generating $8.8 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Diamondback Energy, Inc. stock overvalued or undervalued?
Diamondback Energy, Inc. (FANG) trades at a P/E ratio of 26.2x, which is above the sector median of N/A. The EV/Sales multiple is 3.8x. Free cash flow yield is 20.2%, which represents an attractive cash return to investors.
Q: Does Diamondback Energy, Inc. pay a dividend?
Diamondback Energy, Inc. (FANG) currently pays a dividend yield of 2.7%. Including share buybacks, the total shareholder yield is 3.4%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is Diamondback Energy, Inc.'s revenue and earnings growth?
Diamondback Energy, Inc. (FANG) grew revenue by 35.8% year-over-year. Earnings per share decreased by 63.3% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: Is Diamondback Energy, Inc. buying back stock?
Diamondback Energy, Inc. (FANG) repurchased $305.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.7%.
Q: How does Diamondback Energy, Inc. compare to competitors in Energy?
Compared to other companies in Energy, Diamondback Energy, Inc. (FANG) shows: ROIC of 1.6% is below the sector median of 6.9% (Bottom 29%). FCF margin of 58.3% exceeds the sector median of 8.8% (Top 14% of sector). These rankings are based on MetricDuck's analysis of all Energy companies with available SEC filings.
Q: What warning signs should I watch for with Diamondback Energy, Inc.?
Investors in Diamondback Energy, Inc. (FANG) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-05. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.