Diamondback Energy, Inc. (FANG) Stock Analysis — Fair Value, Risk & Moat Rating
NMS · Energy · Oil & Gas E&P
Is Diamondback Energy, Inc. a safe investment right now?
Diamondback Energy, Inc.'s Altman Z-Score of 1.39 places it in the distress zone. Our DCF model estimates intrinsic value at $45.17, suggesting the stock is overvalued by 306%. Moat rating: 2.3/5 stars.
Could Diamondback Energy, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 1.39 falls below the 1.8 distress threshold, indicating significant financial stress.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives FANG's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | -0.0401 | 1.2 | -0.05 |
| B · Retained Earnings / Total Assets | RE / TA | 0.063 | 1.4 | 0.09 |
| C · EBIT / Total Assets | EBIT / TA | 0.0679 | 3.3 | 0.22 |
| D · Market Cap / Total Liabilities | MCap / TL | 1.8814 | 0.6 | 1.13 |
| E · Revenue / Total Assets | Rev / TA | 0 | 1.0 | 0.0 |
How has FANG's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2016 | 48.31 | Safe |
| 2017 | 23.02 | Safe |
| 2018 | 14.07 | Safe |
| 2019 | 4.55 | Safe |
| 2020 | 3.88 | Safe |
| 2021 | 3.96 | Safe |
| 2022 | 2.18 | Gray |
| 2023 | 3.55 | Safe |
| 2024 | 3.52 | Safe |
| 2025 | 1.39 | Distress |
Source: Calculated from FANG's latest 10-K filing on SEC EDGAR.
What is Diamondback Energy, Inc. actually worth?
Fair value range: $12.71 — $64.64
Valuation Methods
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $64.64 | 50% | 11.3x avg PE (3 years) × $5.72 forward EPS |
| DCF (Discounted Cash Flow) | $12.71 | 30% | Two-stage DCF: $0.5B TTM FCF, 9.5% growth, 7.0% WACC |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 9.5% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | 28.5% | Consensus (31 analysts) |
| Analyst EPS Growth (Next Year) | -1.4% | Consensus |
| Historical 5Y FCF CAGR | 0% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 7.0% | CAPM (Rf=4.3% + 0.5*5.5%) |
| Net Cash / (Debt) | $-14,412M | Balance sheet |
| Base FCF (TTM) | $0.5B | Trailing 12 months |
| Shares Outstanding | 281,311,730 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 7.0% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $28.48 | $21.04 | $34.66 | $15.18 |
| 2.5% | $32.97 | $24.18 | $40.29 | $17.27 |
| 5.0% | $38.12 | $27.75 | $46.77 | $19.64 |
| 7.5% | $45.15 | $32.56 | $55.68 | $22.74 |
Free Cash Flow History
| Year | FCF | Growth |
|---|
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Does Diamondback Energy, Inc. have a durable competitive advantage?
Moat rating: 2.3/5.
What makes up FANG's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 2/5.
How stable is FANG's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2016 | 8.2% | — |
| 2017 | -14.4% | Declining |
| 2018 | -0.9% | Rising |
| 2019 | 9.0% | Rising |
| 2020 | 5.0% | Declining |
| 2021 | 3.1% | Declining |
| 2022 | -33.8% | Declining |
| 2023 | 18.9% | Rising |
| 2024 | 24.2% | Rising |
| 2025 | 7.3% | Declining |
Source: ROIC calculated from SEC EDGAR filings.
Is Diamondback Energy, Inc.'s dividend safe?
Can Diamondback Energy, Inc. afford its dividend?
Payout ratio is 69.8%. FCF covers the dividend 0.0x. 9 consecutive years of payments.
Diamondback Energy, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $2.8B | $3.9B | N/A | — |
| Net Income | $3.1B | $4.4B | −$4.5B | Rising |
Common questions about Diamondback Energy, Inc.
Is Diamondback Energy, Inc. at risk of going bankrupt?
Diamondback Energy, Inc.'s Altman Z-Score of 1.39 places it in the distress zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is Diamondback Energy, Inc.'s intrinsic value based on DCF?
Our DCF model estimates Diamondback Energy, Inc.'s intrinsic value at $45.17 per share. The current margin of safety is -306.1%. This estimate is based on historical free cash flow trends and a risk-adjusted discount rate.
Does Diamondback Energy, Inc. have a competitive moat?
Diamondback Energy, Inc. receives a moat rating of 2.3 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Is Diamondback Energy, Inc.'s dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
Before you invest in Diamondback Energy, Inc., make sure you truly understand it.
A deep understanding of a company's fundamentals, risk profile, and competitive position dramatically increases your investment accuracy and odds of success.
Pass the quiz to earn the FANG Certified Value Investor badge.
FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
FANG analysis methodology: How we calculate fair value, Z-Scores, and moat ratings