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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Diamondback Energy, Inc. (XNAS:FANG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
FANG
Name:
DIAMONDBACK ENERGY, INC. (XNAS:FANG)
Sector:
834.00M
Industry:
Oil & Gas E&P
CEO:
Mr. Travis Stice
Total Employees:
870
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -80.61% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DIAMONDBACK ENERGY, INC.(FANG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND OIL & GAS E&P INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
133.87
One Month Price Target:
$135.41
Six Month Price Target :
$143.1
Likely Price in One Year's Time:
Ticker:
$152.32
Likely Trading Range Today Under (Normal Volatility)
$133.05
Price Upper limit ($) :
$135.19
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$121.17
This week:
$105.48
This month :
$77.09
Other Primary facts
Market Cap:
23.83B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
177.84M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
30.96%
-44.65%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$192.74
$165.42
$75.00
$102.32
Medium risk (<10%) entry points
Buy Call
Sell Call
$156.53
Buy Put:
Sell Put:
$150.70
$111.14
$117.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
FANG
Sharpe Ratio:
3.72%
Comparison:
FANG, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is -19.03% lower than the industry
& ratio is 63.25% higher than the market/S&P 500 average
Average Returns/Yield of
FANG
Daily returns:
0.18%
Weekly returns:
0.92%
Monthly returns:
3.68%
Yearly returns:
61.42%
Comparison of returns:
Average annual returns/yield (last 3 years) is -28.09% below industry average
Classification:
FANG, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.56
Statistical test of Returns:
FANG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.71%
Weekly Volatility:
10.53%
Monthly Volatility:
21.05%
Yearly Volatility:
72.93%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.78%
Volatility in last five trading days has been -41.04% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-9.48%
Weekly VaR:
-21.21%
Monthly VaR:
-42.41%
How Much Can the price of
FANG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-35%
Worst case (decline):
>85%
This translates to price declining to:
$86.49
This translates to price declining to:
$20.08
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
FANG is a 199.36% riskier investment compared to the market/S&P 500 & is 156.46% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.81% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
FANG
Beta in relation to market/S&P 500--2.05
Expected beta in 1 year's time:
1.212
Expected beta in 3 year's time:
1.714
Unlevered (debt free) Beta:
1.512
Beta in relation to Nasdaq (XNAS):
0.917
Beta in relation to all global stocks::
1.031
Beta Comparison & Analysis
Beta of competitors/peers::
28.008
Beta is -92.68% lower than peers
Average Industry Beta:
2.012
Beta is 1.94% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.78%
Sustainable growth rate is -94.10% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.270
Alpha is -39.39% below industry average alpha yield
Alpha is 1716% higher than market/& is unsustainably high
Analysis of Cost of Capital of
FANG
Equity cost of capital:
0.172
Equity cost of capital is 1.58% above industry mean WACC
Unlevered (without debt) cost of capital:
12.68%
Before-tax cost of debt:
2.99%
After-tax cost of debt:
2.36%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.36%
WACC is -3.78% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$45.10
Revenue growth rate per share of (3Y):
1.72
Annual revenue growth rate is 12.52% above the industry average
EPS:
$15.20
Expected Annual growth rate of EPS (3Y):
103.02%
Expected future EPS growth rate is 219.61% higher than the Oil & Gas E&P industry
Free cash flow (FCF) per share:
$11.93
Balance sheet equity growth per share: 383.25%
Equity growth rate per share is 207.11% higher than the industry
Debt per share
$32.63
EBITDA per share
$28.22
Valuation Analysis Today of
FANG
P/E Ratio:
6.25
P/E Ratio of Competitors/Peers:
10.81
P/E ratio is -42.16% lower than main peers & is -85.16% lower than the industry
Stock price/value with industry average P/E ratio: $640.12
FANG is -79.09% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.97
Price to sales ratio is -39.71% below the industry mean
P/B (Price to book value ratio):
1.72
Price to free cash flow: 11.22
Price to free cash flow ratio is -26.05% lower than the industry
Net income growth rate (3Y):
49.12%
Net income growth rate is -93.09% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.90%
Dividend yeild: 3.44%
Previous Dividend: $3.05
Previous adjusted dividend: $3.05
Previous Dividend: $4.60
Expected next dividend best case: $3.72
Expected next dividend worst case: $2.38
Average dividend payment (long-term): $0.64
Average dividend increase/decrease (growth rate) % per period: 55.86%
Expected next dividend payment date: 22/08/2022
Expected next dividend record date: 08/10/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 23/05/2022
Previous dividend record date: 05/12/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-11--$3.05
2021-11-09--$0.50
2021-05-12--$0.40
2022-03-03--$0.60
2021-08-11--$0.45
2021-03-03--$0.40
Dividend growth rate is 35.00% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
45.54%
Net debt to equity ratio:
44.72%
Debt to assets ratio:
24.87%
Net debt to assets ratio:
24.43%
Debt-to-asset ratio is -53.30% below industry average
Ability to repay debt:
Interest coverage ratio:
28.67
Interest coverage ratio is 261.54% more than industry average
Looking forward:
Debt growth rate:
14.22%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.463
Statistical significance of correlation:
FANG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.394
Stock price is 17.49% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.394
Correlation of price movement with Nasdaq (^IXIC):
0.041
Covariance of price movement with the market:
0.111
Kurtosis
15.924
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.698
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
FANG
Gross Profit Margin Ratio:
288%
Operating Profit Margin Ratio:
42.79%
Operating profit margin is -3210.15% lower than the industry
Net Profit Margin Ratio:
288%
Effective Tax Rate:
21.60%
Effective tax rate is 9.15% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.51%
Return on equity (ROE) is 152.67% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.75%
Return on assets (ROA) is 410.99% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
0.72
Current ratio is -63.97% below industry average
Cash Conversion Cycle (days):
-5.9
Cash conversion cycle is -108.37% below industry average
The remaining useful life of property plant & equipment is: 22.3 years
Stock based compensation to net income ratio:
0.55%
In-depth Efficiency Analysis
Revenue generated per employee:
9.2M
Each employee generates 15% more revenue than industry average revenue per employee
EBITDA generated per employee:
5.8M
Each employee generates 136% more EBITDA than industry average revenue per employee
Profit generated per employee:
3.2M
Each employee generates 653% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
958.6K
Each employee generates -1140% less free cash flow than industry average revenue per employee
Assets/Capital per employee
25.3M
Each employee generates -1140% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
FANG
PDC ENERGY, INC. (XNAS:PDCE)
CHORD ENERGY CORPORATION (XNAS:CHRD)
RENEWABLE ENERGY GROUP, INC. (XNAS:REGI)
VIPER ENERGY PARTNERS UNT (XNAS:VNOM)
PERMIAN RESOURCES CORPORATION (XNAS:PR)
WEATHERFORD INTERNATIONAL PUBLIC LIMITED COMPANY (XNAS:WFRD)
ALLIANCE RESOURCE PARTNERS UNT (XNAS:ARLP)
HIGHPEAK ENERGY, INC. (XNAS:HPK)
XOG
Current Analyst Ratings
Strong buy�38%
Buy�79%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.02B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.08B
5.94B
-
157.00M
157.00M
-
692.00M
849.00M
1.00M
175.00M
1.32B
5.02B
3.43B
2.74B
3.64B
787.00M
2.74B
Statement of Cash Flow
Date:
Period:
313.00M
Differed Income Tax :
89.00M
Stock Based Compensation :
15.00M
Change in Working Capital :
32.00M
Accounts Receivables:
- 403000.00K
Other Working Capital:
-
Other Non-Cash Items:
24.00M
Net Cash Provided by Operating Activities:
1.25B
Investments in PP&E:
- 418000.00K
Net Acquisitions:
-
Purchases of Investments:
- 29000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
149.00M
-
149.00M
-
62.00M
1.14B
1.35B
21.11B
-
-
643.00M
37.00M
196.00M
21.98B
-
23.33B
49.00M
45.00M
-
-
1.78B
1.87B
5.80B
1.66B
7.61B
-
9.48B
2.00M
- 1326000.00K
-
14.07B
March 31, 2022 at 6:00:00 AM
2.93B
12.74B
22.22B
-
5.85B
5.7B
-
- 269000.00K
- 716000.00K
-
-
-
- 107000.00K
- 934000.00K
- 1041000.00K
-
- 505000.00K
167.00M
672.00M
1.25B
- 418000.00K
834.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
FANG
2023
2024
2025
2026
2027
$153.08
$258.04
$293.61
$334.08
$380.13