Diamondback Energy Intrinsic Value Calculation – Diamondback Energy Reports Record Revenue Despite Missing Non-GAAP EPS Estimate
May 3, 2023
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Diamondback Energy ($NASDAQ:FANG) is a leading independent oil and natural gas exploration and production company based in Midland, Texas. The company has successfully developed large acreage positions across the Permian Basin, which is one of the most prolific and cost-competitive basins in North America. The company reported Non-GAAP EPS of $4.10, which was $0.20 lower than expected.
However, Diamondback Energy’s revenue of $1.93B was $10M higher than anticipated. This was attributed to higher realized commodity prices, higher average daily production, and lower operating costs. The company also experienced an increase in revenue from its midstream operations due to increased natural gas volumes sold. Overall, Diamondback Energy’s third quarter revenue exceeded analyst expectations and set a new record. Despite missing the Non-GAAP EPS estimate, the company still reported strong financial results, positioning itself well for the future.
Price History
Despite this, the stock opened at $140.0 and closed at $141.9, down by 0.2% from the prior closing price of $142.2. This could possibly be attributed to investors being cautious due to the miss in non-GAAP EPS and uncertainty surrounding the potential effects of the ongoing pandemic. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Diamondback Energy. More…
| Total Revenues | Net Income | Net Margin |
| 9.64k | 4.39k | 50.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Diamondback Energy. More…
| Operations | Investing | Financing |
| 6.33k | -3.33k | -3.5k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Diamondback Energy. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 26.21k | 10.52k | 83.46 |
Key Ratios Snapshot
Some of the financial key ratios for Diamondback Energy are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 34.5% | 63.8% | 61.0% |
| FCF Margin | ROE | ROA |
| 29.2% | 25.5% | 14.0% |
Analysis – Diamondback Energy Intrinsic Value Calculation
At GoodWhale, we conducted an analysis of DIAMONDBACK ENERGY‘s financials and arrived at a fair value of around $132.2 for its share. This value was calculated using our proprietary Valuation Line, which takes into account the company’s fundamentals, market conditions and numerous other factors. At the moment, DIAMONDBACK ENERGY stock is trading at $141.9, which is a fair price but still slightly overvalued by 7.3%. We believe that this slight overvaluation may be attributed to investor sentiment, which is often more optimistic than what the numbers alone would suggest. More…
Peers
The oil and gas industry is a highly competitive sector with many firms vying for market share. Among the top competitors in this industry are Diamondback Energy Inc, Pioneer Natural Resources Co, Hess Corp, and Continental Resources Inc. All of these companies are engaged in a fierce battle to gain an advantage over the others in terms of production, reserves, and market share. While each company has its own strengths and weaknesses, they all share one common goal: to be the leading firm in the oil and gas industry.
– Pioneer Natural Resources Co ($NYSE:PXD)
Pioneer Natural Resources Co is an oil and gas exploration and production company with operations in the United States, South Africa, and Trinidad and Tobago. The company has a market cap of 58.25B as of 2022 and a return on equity of 21.22%. Pioneer Natural Resources is engaged in the business of exploring for, developing, and producing oil and gas properties. The company was founded in 1997 and is headquartered in Irving, Texas.
– Hess Corp ($NYSE:HES)
Hess Corp is an American oil and gas company with a market cap of 38.67B as of 2022. The company has a Return on Equity of 29.47%. Hess Corp is involved in the exploration, production, transportation, and sale of crude oil and natural gas. The company also has refining and marketing operations.
– Continental Resources Inc ($NYSE:CLR)
Continental Resources, Inc. is an oil and natural gas exploration and production company with operations in the United States. The company has a market cap of $26.51 billion and a return on equity of 30.54%. Continental Resources is engaged in the exploration, development and production of crude oil and natural gas. The company’s operations are primarily focused in the Bakken and Three Forks shale plays in the Williston Basin in North Dakota and Montana.
Summary
Diamondback Energy recently released its non-GAAP earnings report, revealing a miss on their EPS of $4.10, missing analysts’ estimates by $0.20. However, revenue came in at $1.93 billion, beating estimates by $10 million. Diamondback Energy’s stock has been on a decline for some time now and investors are hoping that this report will mark a turnaround in the company’s performance. As its peers experience declines in the oil market, Diamondback Energy has taken steps to increase efficiency and reduce costs, making the company a promising choice for investors looking for long-term growth.
