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 208 industry peers in the Oil, Gas & Consumable Fuels industry. FANG scores excellent on profitability, but 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.
In the past 5 years FANG always reported a positive cash flow from operatings.
1.2 Ratios
FANG has a better Return On Assets (5.31%) than 62.50% of its industry peers.
Looking at the Return On Equity, with a value of 9.82%, FANG is in line with its industry, outperforming 56.73% of the companies in the same industry.
FANG has a Return On Invested Capital (6.25%) which is comparable to the rest of the 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 23.51%.
The 3 year average ROIC (13.71%) for FANG is well above the current ROIC(6.25%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.31% | ||
| ROE | 9.82% | ||
| ROIC | 6.25% |
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 has a Profit Margin of 27.11%. This is amongst the best in the industry. FANG outperforms 80.77% of its industry peers.
In the last couple of years the Profit Margin of FANG has grown nicely.
Looking at the Operating Margin, with a value of 37.63%, FANG belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
In the last couple of years the Operating Margin of FANG has grown nicely.
With an excellent Gross Margin value of 70.77%, FANG belongs to the best of the industry, outperforming 80.77% of the companies in the same industry.
In the last couple of years the Gross Margin of FANG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.63% | ||
| PM (TTM) | 27.11% | ||
| GM | 70.77% |
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
FANG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, FANG has more shares outstanding
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
Based on the Altman-Z score of 1.26, we must say that FANG is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of FANG (1.26) is comparable to the rest of the industry.
FANG has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
FANG has a Debt to Equity ratio (0.39) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.26 |
ROIC/WACC0.74
WACC8.44%
2.3 Liquidity
FANG has a Current Ratio of 0.55. 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 Current ratio (0.55) than 83.65% of its industry peers.
A Quick Ratio of 0.52 indicates that FANG may have some problems paying its short term obligations.
FANG has a Quick ratio of 0.52. This is amonst the worse of the industry: FANG underperforms 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The earnings per share for FANG have decreased strongly by -26.08% in the last year.
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.
FANG shows a strong growth in Revenue. In the last year, the Revenue has grown by 51.78%.
FANG shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.79% yearly.
EPS 1Y (TTM)-26.08%
EPS 3Y12.48%
EPS 5Y19.84%
EPS Q2Q%-40.93%
Revenue 1Y (TTM)51.78%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%48.13%
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-14.39%
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
EPS Next 5Y0.86%
Revenue Next Year33.56%
Revenue Next 2Y14.5%
Revenue Next 3Y11.77%
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 9.84, which indicates a very decent valuation of FANG.
FANG's Price/Earnings ratio is a bit cheaper when compared to the industry. FANG is cheaper than 75.96% of the companies in the same industry.
When comparing the Price/Earnings ratio of FANG to the average of the S&P500 Index (27.11), we can say FANG is valued rather cheaply.
FANG is valuated reasonably with a Price/Forward Earnings ratio of 10.71.
Based on the Price/Forward Earnings ratio, FANG is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
FANG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.78.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.84 | ||
| Fwd PE | 10.71 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FANG indicates a somewhat cheap valuation: FANG is cheaper than 66.35% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.79 |
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)0.5
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.92%, FANG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.33, FANG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, FANG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
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
32.98% 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.
DP32.98%
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
139.98
+1.49 (+1.08%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners59.61%
Inst Owner Change-2.89%
Ins Owners35.52%
Ins Owner Change5.87%
Market Cap40.90B
Analysts84.32
Price Target187.93 (34.25%)
Short Float %4.16%
Short Ratio3.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
Yearly Dividend6.72
Dividend Growth(5Y)57.49%
DP32.98%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.38%
Min EPS beat(2)-7.02%
Max EPS beat(2)7.78%
EPS beat(4)2
Avg EPS beat(4)-2.35%
Min EPS beat(4)-16.8%
Max EPS beat(4)7.78%
EPS beat(8)3
Avg EPS beat(8)-0.55%
EPS beat(12)4
Avg EPS beat(12)-1.61%
EPS beat(16)8
Avg EPS beat(16)0.52%
Revenue beat(2)2
Avg Revenue beat(2)6.73%
Min Revenue beat(2)6.44%
Max Revenue beat(2)7.01%
Revenue beat(4)4
Avg Revenue beat(4)5.7%
Min Revenue beat(4)3.11%
Max Revenue beat(4)7.01%
Revenue beat(8)8
Avg Revenue beat(8)5.5%
Revenue beat(12)9
Avg Revenue beat(12)2.7%
Revenue beat(16)13
Avg Revenue beat(16)6.87%
PT rev (1m)-0.15%
PT rev (3m)-2.46%
EPS NQ rev (1m)-3.83%
EPS NQ rev (3m)-9.85%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.72%
Revenue NQ rev (1m)-0.98%
Revenue NQ rev (3m)-3.72%
Revenue NY rev (1m)0.46%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.84 | ||
| Fwd PE | 10.71 | ||
| P/S | 2.9 | ||
| P/FCF | N/A | ||
| P/OCF | 5.39 | ||
| P/B | 1.05 | ||
| P/tB | 1.05 | ||
| EV/EBITDA | 5.79 |
EPS(TTM)14.23
EY10.17%
EPS(NY)13.07
Fwd EY9.34%
FCF(TTM)-28.88
FCFYN/A
OCF(TTM)25.95
OCFY18.54%
SpS48.2
BVpS133.08
TBVpS133.08
PEG (NY)N/A
PEG (5Y)0.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.31% | ||
| ROE | 9.82% | ||
| ROCE | 7.77% | ||
| ROIC | 6.25% | ||
| ROICexc | 6.27% | ||
| ROICexgc | 6.27% | ||
| OM | 37.63% | ||
| PM (TTM) | 27.11% | ||
| GM | 70.77% | ||
| 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 Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.39 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.58 | ||
| Cap/Depr | 375.95% | ||
| Cap/Sales | 113.76% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 79.31% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.55 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 1.26 |
F-Score5
WACC8.44%
ROIC/WACC0.74
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)-26.08%
EPS 3Y12.48%
EPS 5Y19.84%
EPS Q2Q%-40.93%
EPS Next Y-14.39%
EPS Next 2Y-9.72%
EPS Next 3Y0.38%
EPS Next 5Y0.86%
Revenue 1Y (TTM)51.78%
Revenue growth 3Y17.64%
Revenue growth 5Y22.79%
Sales Q2Q%48.13%
Revenue Next Year33.56%
Revenue Next 2Y14.5%
Revenue Next 3Y11.77%
Revenue Next 5Y8.61%
EBIT growth 1Y9.6%
EBIT growth 3Y4.83%
EBIT growth 5Y25.91%
EBIT Next Year117.21%
EBIT Next 3Y31.99%
EBIT Next 5Y19.39%
FCF growth 1Y-598.64%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y20.27%
OCF growth 3Y17.59%
OCF growth 5Y18.59%