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what it is
Diamondback buys and drills Permian oil and gas wells, then sells the barrels and gas they pump out.
how it gets paid
Last year Diamondback made $15.0B in revenue. Oil sales was the main engine at $9.4B, or 63% of sales.
why it's growing
Revenue grew 35.8% last year. Revenue was up 197% vs. prior year, but EPS came in 32.56% below the $2.58 estimate.
what just happened
Diamondback missed estimates with $1.74 EPS, while revenue still reached $11.7B.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
5/100 earnings predictability — expect surprises
11.1x trailing p/e — the market's not buying it — or you found a deal
3.0% dividend yield — cash in your pocket every quarter
5.5% return on capital — nothing to write home about
xvary composite: 56/100 — below average
What they do
Diamondback buys and drills Permian oil and gas wells, then sells the barrels and gas they pump out.
Permian Basin acreage (land rights) means your wells sit in one dense patch, not a scattered mess. Diamondback operated 318 wells in Midland and 36 in Delaware at year-end 2024, so one playbook covers 354 wells. That scale matters when 598,300 barrels of oil equivalent per day spreads fixed costs across a lot of output.
How they make money
$15.0B
annual revenue · their business grew +35.8% last year
Oil sales
$9.4B
+31.0%
Natural gas sales
$1.8B
+18.0%
NGL sales
$2.3B
+28.0%
Marketing and other
$1.5B
+40.0%
The products that matter
drills and sells crude oil
Crude Oil Production
$11.2B · 75% of revenue
it's the core business: $11.2B of the $15.0B revenue base. when oil prices cooperate, this is the engine. when they don't, you feel it everywhere.
core driver
extracts gas and liquids
Natural Gas & NGLs
$3.8B · +52%
this $3.8B stream grew faster than oil last year. that's helpful, but it's still only one quarter of revenue.
secondary stream
future drilling inventory
Barnett Shale Inventory
900+ locations
management disclosed 900+ Barnett locations and a nearly 20-year runway. that's not current revenue — it's the inventory behind the production story.
inventory depth
Key numbers
$15.0B
annual revenue
Revenue is the top line. At $15.0B, every 1% change is $150M.
11.1x
trailing p/e
Trailing p/e → last year's price divided by earnings → you pay $11.10 for each $1 of profit.
3.0%
dividend yield
Dividend yield → cash back on your shares → you get $3.00 a year for every $100 owned.
$190
18-mo target
The target sits 29% above $147.56, so the market still sees room.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- long-term debt $15.8B (27% of capital)
- net profit margin 26.3% — keeps 26 cents of every dollar in revenue
- return on equity 10% — $0.10 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in FANG 3 years ago → it's now worth $11,510.
The index would have given you $14,770.
source: institutional data · total return
What just happened
missed estimates
Diamondback missed estimates with $1.74 EPS, while revenue still reached $11.7B.
Revenue was up 197% vs. prior year, but EPS came in 32.56% below the $2.58 estimate. That is the shale business in one line: huge top line, messy bottom line.
$11.7B
revenue
$1.74
eps
8.4%
margin
earnings miss
The 32.56% miss matters because it shows how fast costs and timing can eat a huge revenue quarter.
-
we think diamondback energy’s sales and share earnings fell in the fourth quarter.
-
to wit, we expect sales of $3.49 billion and share earnings of $2.58.
-
as a result of asset buys in 2025, we anticipate production volume to rise by a whopping 46%, to 940,000 barrels of oil equivalent per day (boe/d).however, we look for the price per barrel of oil equivalent to drop to $38.50, compared to the year-ago price of $46.74.
-
in addition, the cost of producing a barrel of oil is likely to have risen 17%, due to supply-chain inefficiencies and cost inflation associated with drilling equipment.
-
we look for oil prices to remain depressed through at least the first half of 2026.
source: company earnings report, 2026
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What could go wrong
the #1 risk is permian cash flow getting squeezed by weaker realized prices. FANG can grow volume and still disappoint you if commodity pricing and costs move the wrong way.
high
Commodity price compression
Expected production volume rises to 940,000 boe/d, but the expected price per barrel equivalent drops to $38.50 from $46.74.
That price move hits essentially the whole $15.0B revenue base, not just one segment.
high
Another impairment-style reset
Diamondback booked a $3.7B impairment charge in 2025. That turned a strong cash year into a reminder that asset values are not fixed.
Another multi-billion write-down would pressure book value and make the 11.1x earnings multiple look less cheap.
med
Cost inflation in the field
Per-barrel production costs are expected to rise 17% because drilling and service inputs got more expensive.
Rising costs with falling realized prices is how you miss EPS even while production grows.
med
Antitrust litigation
Diamondback is among shale producers named in price-fixing litigation filed in 2024, with class-action status being pursued.
The numbers here are thin in the snapshot, so we won't invent a damages figure. Legal overhang still matters.
One way to frame it: 2025 already showed the mix you fear most in an upstream producer — a $3.7B write-down, softer pricing, and earnings that missed even with heavy cash generation.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
Q1 2026 earnings report
Expected May 3–4, 2026. After the Q4 miss, the next print needs to show whether the $10.30 full-year EPS recovery still looks real.
pricing
Realized price per barrel equivalent
The expected drop to $38.50 from $46.74 matters more than the production headline. More volume with weaker pricing is not the win it sounds like.
costs
Per-barrel production costs
Costs are expected to run 17% higher. If that number keeps climbing, cash flow quality starts slipping even before production does.
legal
Antitrust lawsuit proceedings
The litigation is still moving through the courts. This is not the core thesis, but it is an overhang you do not ignore.
Analyst rankings
earnings predictability
5 / 100
earnings are hard to model here. in human-speak, analysts do not trust the next few quarters to behave nicely.
source: institutional data
Institutional activity
475 buyers vs. 509 sellers in 3q2025. total institutional holdings: 0.2B shares.
source: institutional data
Price targets
3-5 year target range
$118
$262
$148
current price
$190
target midpoint · +29% from current · 3-5yr high: $245 (+65% · 16% ann'l return)
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