Oil & Gas Exploration & Production · NASDAQ
Current Price
$205.32
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Diamondback Energy, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Diamondback Energy, Inc., an independent oil and natural gas company, focuses on the acquisition, development, exploration, and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas. It focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin; and the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin in West Texas and New Mexico. As of December 31, 2021, the company's total acreage position was approximately 524,700 gross acres in the Permian Basin; and estimated proved oil and natural gas reserves were 1,788,991 thousand barrels of crude oil equivalent. It also held working interests in 5,289 gross producing wells, as well as royalty interests in 6,455 additional wells. In addition, the company owns mineral interests approximately 930,871 gross acres and 27,027 net royalty acres in the Permian Basin and Eagle Ford Shale; and owns, operates, develops, and acquires midstream infrastructure assets, including 866 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system in the Midland and Delaware Basins of the Permian Basin. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.
ROIC (TTM)
6.0%
ROE (TTM)
4.3%
FCF Yield
2.35%
Based on trailing twelve-month data, FANG shows a free cash flow per share of N/A and a ROIC of 6.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 2.35% are important context metrics when evaluating FANG's stock valuation relative to peers.
The intrinsic value of FANG depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether FANG is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $205.32. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Diamondback Energy, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Exploration & Production industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting FANG's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Diamondback Energy, Inc., this means projecting how much free cash flow the Oil & Gas Exploration & Production will produce over the next 5-10 years, then discounting those amounts to today's dollars. FANG's ROIC of 6.0% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For FANG, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
