We’ve recently updated our valuation analysis.

Diamondback Energy Valuation

Is FANG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FANG?

Other financial metrics that can be useful for relative valuation.

FANG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3.6x
Enterprise Value/EBITDA4.5x
PEG Ratio-0.5x

Price to Earnings Ratio vs Peers

How does FANG's PE Ratio compare to its peers?

The above table shows the PE ratio for FANG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average12x
DVN Devon Energy
7.1x-14.1%US$44.7b
PXD Pioneer Natural Resources
8.5x-14.5%US$60.4b
EQT EQT
8.5x40.5%US$15.8b
HES Hess
23.8x3.3%US$44.4b
FANG Diamondback Energy
6x-11.0%US$32.0b

Price-To-Earnings vs Peers: FANG is good value based on its Price-To-Earnings Ratio (6x) compared to the peer average (12x).


Price to Earnings Ratio vs Industry

How does FANG's PE Ratio compare vs other companies in the US Oil and Gas Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a-12.7%
n/an/an/a

Price-To-Earnings vs Industry: FANG is good value based on its Price-To-Earnings Ratio (6x) compared to the US Oil and Gas industry average (7.5x)


Price to Earnings Ratio vs Fair Ratio

What is FANG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FANG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio6x
Fair PE Ratio8.8x

Price-To-Earnings vs Fair Ratio: FANG is good value based on its Price-To-Earnings Ratio (6x) compared to the estimated Fair Price-To-Earnings Ratio (8.8x).


Share Price vs Fair Value

What is the Fair Price of FANG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FANG ($149.32) is trading above our estimate of fair value ($75.34)

Significantly Below Fair Value: FANG is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst FANG forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$149.32
US$181.38
+21.5%
12.2%US$230.00US$116.00n/a29
Nov ’23US$158.63
US$173.58
+9.4%
12.0%US$230.00US$125.00n/a31
Oct ’23US$120.46
US$172.73
+43.4%
13.2%US$230.00US$120.00n/a30
Sep ’23US$130.30
US$171.00
+31.2%
13.7%US$230.00US$120.00n/a30
Aug ’23US$125.92
US$172.58
+37.1%
12.5%US$224.00US$124.00n/a31
Jul ’23US$121.21
US$181.06
+49.4%
13.8%US$236.00US$124.00n/a31
Jun ’23US$152.89
US$178.74
+16.9%
13.6%US$233.00US$124.00n/a31
May ’23US$126.23
US$177.41
+40.5%
11.9%US$233.00US$137.00n/a32
Apr ’23US$138.44
US$166.28
+20.1%
12.9%US$233.00US$135.00n/a32
Mar ’23US$136.83
US$149.21
+9.0%
9.0%US$179.00US$122.00n/a34
Feb ’23US$130.21
US$142.47
+9.4%
8.8%US$165.00US$120.00n/a34
Jan ’23US$107.85
US$134.26
+24.5%
11.0%US$165.00US$105.00n/a34
Dec ’22US$103.00
US$133.06
+29.2%
11.3%US$165.00US$105.00n/a34
Nov ’22US$111.61
US$128.44
+15.1%
10.6%US$165.00US$105.00US$158.6334
Oct ’22US$98.86
US$115.48
+16.8%
8.7%US$137.00US$100.00US$120.4633
Sep ’22US$74.16
US$114.09
+53.8%
9.7%US$141.00US$90.00US$130.3033
Aug ’22US$77.13
US$113.65
+47.3%
10.7%US$141.00US$88.00US$125.9234
Jul ’22US$99.60
US$108.54
+9.0%
13.1%US$137.00US$70.00US$121.2135
Jun ’22US$86.61
US$102.29
+18.1%
14.9%US$137.00US$70.00US$152.8935
May ’22US$81.73
US$97.31
+19.1%
13.5%US$125.00US$70.00US$126.2335
Apr ’22US$81.22
US$92.31
+13.7%
14.7%US$123.00US$68.00US$138.4432
Mar ’22US$73.66
US$80.48
+9.3%
12.7%US$105.00US$61.00US$136.8331
Feb ’22US$57.98
US$73.42
+26.6%
17.2%US$103.00US$46.00US$130.2133
Jan ’22US$48.40
US$61.30
+26.7%
19.4%US$94.00US$45.00US$107.8530
Dec ’21US$39.85
US$54.56
+36.9%
23.7%US$94.00US$35.00US$103.0033
Nov ’21US$25.96
US$54.46
+109.8%
23.7%US$93.00US$34.50US$111.6134

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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