Diamondback Energy, Inc. (FANG) Fair Value & PE Analysis
Oil & Gas Exploration & Production · NASDAQ
Current Price
$210.72
PE Ratio (TTM)
41.2x
Intrinsic Value
$151.66
-38.9% margin of safety
What Is Diamondback Energy, Inc.'s Fair Value?
As of 2026-08-21, applying a 37.4x earnings multiple to Diamondback Energy, Inc.'s (FANG) earnings per share of $5.64 yields a fair value estimate of $151.66 per share, versus a market price of $210.72.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $128.5 to $178.02. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How the PE model works · Recalculate in PE mode · FANG intrinsic value (DCF view)
Is Diamondback Energy, Inc. (FANG) Overvalued?
At $210.72, FANG trades above its PE-based fair value estimate, meaning the market pays a premium over the applied earnings multiple. By this model the stock looks expensive unless earnings grow into the price.
COMPETITIVE MOAT
↑Efficient Operations Drive Cost Advantage
Diamondback's focus on operational efficiency and low production costs allows it to generate strong returns even in volatile commodity price environments. This cost leadership is a key competitive advantage.
↑Strategic Permian Basin Acreage
The company holds significant, high-quality acreage in the Permian Basin, a highly prolific and cost-effective oil-producing region. This concentrated asset base provides a long-term operational advantage.
↑Shareholder Returns Focus
Diamondback's commitment to returning capital to shareholders through dividends and buybacks fosters investor loyalty and can support its valuation. This capital discipline is a differentiator.
INVESTMENT RISKS
↓Execution Risk on Production Growth
Achieving higher production guidance without increasing capital expenditure relies heavily on continued efficiency gains. Any operational setbacks could hinder earnings momentum.
↓Geopolitical Instability
Global events and geopolitical tensions can significantly influence oil supply and demand dynamics, leading to unpredictable price swings and impacting operational planning.
↓Competition for Talent and Resources
The highly competitive nature of the oil and gas industry can lead to increased costs for skilled labor and essential equipment, potentially impacting operational efficiency.
Base case
FANG base case PE valuation
Intrinsic Value
$151.66
Margin of safety
-38.9%
Expected annual return
-6.4%
Base case assumptions: -0.1% annual earnings growth, 37.36x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the FANG PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Diamondback Energy, Inc. respond.
Open PE Calculator for FANGCompany Overview
Diamondback Energy, Inc. operates as an independent enterprise focused on oil and natural gas. Its core business involves the acquisition, development, exploration, and production of unconventional and onshore hydrocarbon reserves, predominantly located within the Permian Basin across West Texas and New Mexico. The company's development efforts primarily target significant geological formations, including the Spraberry and Wolfcamp in the Midland Basin, as well as the Wolfcamp and Bone Spring within the Delaware Basin – both crucial components of the broader Permian. As of December 31, 2021, Diamondback Energy's asset base included approximately 524,700 gross acres under its control in the Permian Basin. At that time, its estimated proved oil and natural gas reserves amounted to 1,788,991 thousand barrels of crude oil equivalent. The company also maintained working interests in 5,289 gross producing wells and held royalty interests in an additional 6,455 wells. Beyond its direct well operations, Diamondback Energy possesses mineral interests spanning roughly 930,871 gross acres and 27,027 net royalty acres across the Permian Basin and the Eagle Ford Shale. Furthermore, it manages a portfolio of midstream infrastructure, owning, operating, developing, and acquiring assets such as 866 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system within the Midland and Delaware Basins of the Permian. Established in 2007, Diamondback Energy, Inc. is headquartered in Midland, Texas.
Financial Metrics — FANG PE Stock Valuation Data
PE Ratio (TTM)
41.2x
PEG Ratio
n/m
Earnings Yield
2.68%
ROE (TTM)
4.2%
Revenue/Share (TTM)
$60.82
Dividend Yield
2.02%
Debt/Equity
0.33x
Frequently Asked Questions
What is the PE ratio of FANG?
The trailing twelve-month PE ratio of FANG reflects how much investors pay per dollar of Diamondback Energy, Inc.'s earnings. This metric is most useful when compared to Oil & Gas Exploration & Production peers and the company's own historical range.
Is FANG overvalued based on PE ratio?
FANG's PE of 41.2x combined with a PEG ratio of -0.65 provides a growth-adjusted perspective. FANG has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Exploration & Production, a DCF analysis may be more appropriate.
How do I value FANG stock using PE ratio?
To value Diamondback Energy, Inc. using PE: (1) Compare the current PE (41.2x) against the Oil & Gas Exploration & Production median to assess relative pricing, (2) check the PEG ratio (-0.65) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of FANG?
FANG's PEG ratio is -0.65, calculated by dividing the PE ratio (41.2x) by the expected earnings growth rate. Because FANG has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for FANG stock valuation?
PE ratio gives a quick relative read — how FANG is priced versus Oil & Gas Exploration & Production peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See FANG DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value FANG with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.