FANG
Diamondback Energy, Inc.$179.04
Sell
Target $87.39
Report: Mar 08, 2026Energy • Oil & Gas Exploration & Production • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$179.04-51.2%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$87.39
(51% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$204.91
52 Week Low$114.00
Avg. 3 Month Volume2.86M
Efficiency
LTM Gross Margin68.7%
LTM EBITDA Margin48.4%
LTM EBIT Margin14.9%
LTM Operating Margin8.4%
LTM ROA2.3%
LTM ROE4.3%
LTM ROIC2.7%
LTM ROCE3.3%
Capital Structure
Market Cap (MM)$55.8B
Enterprise Value (MM)$70.2B
Shares Outstanding285.75M
Total Debt (MM)$14.49B
Cash & Equivalents (MM)$106.00M
LTM Net Debt (MM)$14.38B
LTM Net Debt/EBITDA2.0x
Growth
TTM Rev. Growth35.8%
Last 3-Yr Rev. CAGR15.9%
Last 3-Yr EBITDA CAGR1.0%
Last 3-Yr EPS CAGR-38.5%
Valuation
Street Target Price$182.64
LTM EV/Revenue4.7x
LTM EV/Gross Profit6.8x
LTM EV/EBIT31.4x
LTM EV/EBITDA9.6x
LTM P/E33.5x
LTM EV/FCF-99.8x
LTM P/FCF-79.4x
LTM P/TB0.8x
LTM P/B1.5x
Dividend Yield2.0%
Payout Ratio69.7%
Executive SummarySituation: Current price is $179.04 versus fair value $87.39 (-51.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Normalization of Operating Margins If the company fails to return operating margins to the 25-30% range in the next two quarters, the market will likely stop treating the 2025 collapse as a one-time event, triggering a significant re-rat... Bear case centers on Lower-for-Longer Commodity Prices A sustained period of oil prices below $60/bbl would impair the company's ability to service its $14.5B debt load and maintain its dividend, potentially leading to a credit event or massive dilution. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Proponents argue that the post-Endeavor scale allows for unprecedented capital efficiency and synergy capture in the Midland Basin, potentially leading to a structural re-rating. They point to the 35.8% revenue growth and the Barnett play's superior oil productivity (75 BO/ft) as evidence of a high-quality, long-duration inventory.
Bear Case
The bear case focuses on the 31-percentage-point operating margin collapse and the negative incremental ROIC of -6.2%, which suggests that recent acquisitions are diluting shareholder value. Furthermore, the $1.45B in insider sales and the 27.5% decline in tangible book value per share indicate that the company's asset base is eroding faster than the market realizes.
Key Catalysts
Near-Term (0-6 months)Impact: High
Normalization of Operating Margins If the company fails to return operating margins to the 25-30% range in the next two quarters, the market...
Mid-Term (6-18 months)Impact: Critical
Institutional Rotation As large holders like Wellington (+74% stake) and UBS (+19.6% stake) digest the $1.45B insider sell-off and the negat...
Long-Term (18+ months)Impact: Moderate
Diamondback is relevant for analysis at this moment because it is trading near all-time highs while its fundamental profitability has reache...
Primary Risks
Concern: High
Lower-for-Longer Commodity Prices A sustained period of oil prices below $60/bbl would impair the company's ability to service its $14.5B de...
Concern: Medium
Inventory Exhaustion The risk that the company's Tier-1 drilling locations are exhausted faster than anticipated, forcing it to move into lo...
Concern: Medium
The stewardship verdict is a 'Governance Outcome Tree' defined by the current leadership transition: 1. Status Quo: Management continues to...
Recent Activity
2025-09-03Analyst Target
-5.05%Firm: KeyBanc Analyst: Tim Rezvan Price Target: $176.00 Price When Posted: $144.45 Implied Upside: +21.8%
2025-04-17SEC Filing (8-K)
+5.70%Excerpt: (EX-99.1) Document Exhibit 99.1 DIAMONDBACK ENERGY, INC. PROVIDES OPERATIONAL UPDATE FOR THE FIRST QUARTER OF 2025 MIDLAND, Texas, April 16, 2025 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the...
2025-04-10Market Movement
-8.72%Market/Sector Move -8.72%
2024-10-15Analyst Target
-5.73%Firm: Williams Trading Analyst: Gabriele Sorbara Price Target: $230.00 Price When Posted: $190.70 Implied Upside: +20.6%
2024-02-10SEC Filing (SC 13G/A)
+9.38%Beneficial ownership update (SC 13G/A).
Valuation Table
9.8/10Decision Grade
Scenario Range
$104
Bear
$118
Base
$161
Bull
$179