* Note: Prices are in Million (M) USD.
Description:
Diamondback Energy is a company engaged in hydrocarbon exploration and headquartered in Midland, Texas.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $219 M
Debt : $14 M
EBITDA : $8,204 M
Since Cash is greater than Total Debt, 5 points assigned.
This criteria used industry in which company operates:
Sector: Energy
Industry: Oil & gas e&p
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 12.98
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 16 overlapping fiscal years (max 20).Average Free Cash Flow: $32 M
Average Revenue: $2,949 M
Revenue Converted To Free Cash Flow (%): 1.1%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $11,023 M
Revenue 4 Years Ago (2020-12-31): $2,813 M
Last 5 Years Average Revenue Growth: 58%
Since Revenue Growth is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $214 M
Share Count 5 Years Ago (2020-12-31): $158 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $9.66
Trailing 12-Month Earnings Per Share (EPS): $13.27
Average Earnings Per Share (EPS): $11.47
Dividend Per Share (DPS): $4
Payout Ratio: 34%
Dividend Yield: 3%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 2, 2 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 16 valid ROE years (max 20).Average ROE: 1.9%
Since Average ROE is less than 10, 1 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $149
52-Week Low: $113
Threshold Price (15% Above 52-Week Low): $130
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $40,091 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 26 points to above Diamondback Energy Inc (FANG) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Growth Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 10 Years Avg P/E (17.71)
× EPS ($11.47) = $203.05.
Last 10 Years Avg PE 17.71, Fair Value PE 15, Industry Based PE 15, Growth Based PE 50, RCFC Based PE 12.88, ROE Based PE 11.56, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 19.89. Value-Trades has assined P/E value 19.89. Since an average (Current Year EPS + Next Year EPS) earning per share is $11.465.
The fair value of Diamondback Energy Inc (FANG) stock should be (19.89 x $11.465) = $228.05.
