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 210 industry peers in the Oil, Gas & Consumable Fuels industry. While FANG belongs to the best of the industry regarding profitability, 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
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.
Each year in the past 5 years FANG had a positive operating cash flow.
1.2 Ratios
FANG has a better Return On Assets (5.64%) than 63.81% of its industry peers.
FANG has a Return On Equity of 10.27%. This is comparable to the rest of the industry: FANG outperforms 60.00% of its industry peers.
FANG has a Return On Invested Capital (6.50%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for FANG is significantly below the industry average of 23.80%.
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
The Profit Margin of FANG (30.67%) is better than 82.86% of its industry peers.
In the last couple of years the Profit Margin of FANG has grown nicely.
FANG has a better Operating Margin (40.96%) than 85.71% of its industry peers.
In the last couple of years the Operating Margin of FANG has grown nicely.
FANG's Gross Margin of 70.81% is amongst the best of the industry. FANG outperforms 80.95% 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
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.
FANG has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, FANG has an improved debt to assets ratio.
2.2 Solvency
FANG has an Altman-Z score of 1.31. This is a bad value and indicates that FANG is not financially healthy and even has some risk of bankruptcy.
FANG has a Altman-Z score (1.31) which is in line with its industry peers.
FANG has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
FANG has a Debt to Equity ratio (0.34) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.31 |
ROIC/WACC0.75
WACC8.72%
2.3 Liquidity
FANG has a Current 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.
With a Current ratio value of 0.86, FANG is not doing good in the industry: 65.24% of the companies in the same industry are doing better.
A Quick Ratio of 0.83 indicates that FANG may have some problems paying 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
FANG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -12.66%.
Measured over the past years, FANG shows a quite strong growth in Earnings Per Share. The EPS has been growing by 19.84% on average per year.
The Revenue has grown by 47.89% in the past year. This is a very strong growth!
The Revenue has been growing by 22.79% on average over the past years. This is a very strong growth!
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
FANG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.86% yearly.
Based on estimates for the next years, FANG will show a quite strong growth in Revenue. The Revenue will grow by 8.61% on average per year.
EPS Next Y-14.39%
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
EPS Next 5Y0.86%
Revenue Next Year32.95%
Revenue Next 2Y14.1%
Revenue Next 3Y11.49%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 8.70, which indicates a very decent valuation of FANG.
75.71% of the companies in the same industry are more expensive than FANG, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.54. FANG is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 10.70, which indicates a very decent valuation of FANG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FANG indicates a somewhat cheap valuation: FANG is cheaper than 62.86% of the companies listed in the same industry.
FANG is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.7 | ||
| Fwd PE | 10.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FANG is valued a bit cheaper than 64.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.1 |
4.3 Compensation for Growth
FANG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.44
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
5. Dividend
5.1 Amount
FANG has a Yearly Dividend Yield of 2.84%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.49, FANG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, FANG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.84% |
5.2 History
The dividend of FANG is nicely growing with an annual growth rate of 57.49%!
FANG has been paying a dividend for over 5 years, so it has already some track record.
FANG has decreased its dividend recently.
Dividend Growth(5Y)57.49%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
FANG pays out 33.39% of its income as dividend. This is a sustainable payout ratio.
The dividend of FANG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP33.39%
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
139.84
-1.53 (-1.08%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners60.03%
Inst Owner Change-0.49%
Ins Owners35.52%
Ins Owner Change5.88%
Market Cap40.86B
Analysts84.32
Price Target188.7 (34.94%)
Short Float %4.1%
Short Ratio3.25
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)0.41%
PT rev (3m)-10.86%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)-15.45%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)-5.72%
Revenue NQ rev (1m)-0.46%
Revenue NQ rev (3m)-6.28%
Revenue NY rev (1m)-0.38%
Revenue NY rev (3m)-3.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.7 | ||
| Fwd PE | 10.7 | ||
| P/S | 3.17 | ||
| P/FCF | N/A | ||
| P/OCF | 5.5 | ||
| P/B | 1.06 | ||
| P/tB | 1.06 | ||
| EV/EBITDA | 6.1 |
EPS(TTM)16.08
EY11.5%
EPS(NY)13.07
Fwd EY9.35%
FCF(TTM)-18.08
FCFYN/A
OCF(TTM)25.44
OCFY18.2%
SpS44.11
BVpS131.68
TBVpS131.68
PEG (NY)N/A
PEG (5Y)0.44
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 | 1.31 |
F-Score4
WACC8.72%
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-14.39%
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
EPS Next 5Y0.86%
Revenue 1Y (TTM)47.89%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%81.77%
Revenue Next Year32.95%
Revenue Next 2Y14.1%
Revenue Next 3Y11.49%
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%