DIAMONDBACK ENERGY INC (FANG) Stock Fundamental Analysis
NASDAQ:FANG - Nasdaq - US25278X1090 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to FANG. FANG was compared to 211 industry peers in the Oil, Gas & Consumable Fuels industry. FANG scores excellent on profitability, but there are concerns on its financial health. FANG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
FANG had positive earnings in the past year.
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
Looking at the Return On Assets, with a value of 5.64%, FANG is in the better half of the industry, outperforming 63.51% of the companies in the same industry.
Looking at the Return On Equity, with a value of 10.27%, FANG is in line with its industry, outperforming 59.72% of the companies in the same industry.
FANG's Return On Invested Capital of 6.50% is in line compared to the rest of the industry. FANG outperforms 56.40% of its industry peers.
The Average Return On Invested Capital over the past 3 years for FANG is significantly below the industry average of 23.70%.
The last Return On Invested Capital (6.50%) 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 | 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.
In the last couple of years the Profit Margin of FANG has grown nicely.
FANG has a better Operating Margin (40.96%) than 85.78% of its industry peers.
FANG's Operating Margin has improved in the last couple of years.
The Gross Margin of FANG (70.81%) is better than 81.04% of its industry peers.
FANG's Gross Margin has declined in the last couple of years.
| 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.
FANG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, FANG has more shares outstanding
FANG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.30, we must say that FANG is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.30, FANG perfoms like the industry average, outperforming 49.29% of the companies in the same industry.
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 | 1.3 |
ROIC/WACC0.81
WACC8.01%
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.
Looking at the Current ratio, with a value of 0.86, FANG is doing worse than 65.40% of the companies in the same industry.
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.
The Quick ratio of FANG (0.83) 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%.
FANG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 19.84% yearly.
FANG shows a strong growth in Revenue. In the last year, the Revenue has grown by 47.89%.
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.
FANG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.61% yearly.
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
FANG is valuated reasonably with a Price/Earnings ratio of 8.54.
Compared to the rest of the industry, the Price/Earnings ratio of FANG indicates a somewhat cheap valuation: FANG is cheaper than 76.78% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.15. FANG is valued rather cheaply when compared to this.
FANG is valuated reasonably with a Price/Forward Earnings ratio of 10.50.
Based on the Price/Forward Earnings ratio, FANG is valued a bit cheaper than 63.03% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, FANG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.54 | ||
| Fwd PE | 10.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FANG is valued a bit cheaper than 64.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.04 |
4.3 Compensation for Growth
The decent profitability rating of FANG may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.43
EPS Next 2Y-9.69%
EPS Next 3Y0.09%
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 6.66, FANG has a dividend in line with its industry peers.
FANG's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| 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
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%
137.4
-2.37 (-1.7%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners60.03%
Inst Owner Change1.53%
Ins Owners35.52%
Ins Owner Change5.88%
Market Cap40.14B
Analysts83.78
Price Target188.21 (36.98%)
Short Float %3.5%
Short Ratio2.55
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)-11.62%
EPS NQ rev (1m)-0.83%
EPS NQ rev (3m)-19.83%
EPS NY rev (1m)-4.44%
EPS NY rev (3m)-11.83%
Revenue NQ rev (1m)0.55%
Revenue NQ rev (3m)-6.45%
Revenue NY rev (1m)-0.31%
Revenue NY rev (3m)-6.79%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.54 | ||
| Fwd PE | 10.5 | ||
| P/S | 3.12 | ||
| P/FCF | N/A | ||
| P/OCF | 5.4 | ||
| P/B | 1.04 | ||
| P/tB | 1.04 | ||
| EV/EBITDA | 6.04 |
EPS(TTM)16.08
EY11.7%
EPS(NY)13.08
Fwd EY9.52%
FCF(TTM)-18.08
FCFYN/A
OCF(TTM)25.44
OCFY18.52%
SpS44.11
BVpS131.68
TBVpS131.68
PEG (NY)N/A
PEG (5Y)0.43
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 | 1.3 |
F-Score4
WACC8.01%
ROIC/WACC0.81
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%