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XBRL · SEC EDGAR2016–2025(10yr)| Metric | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $527.1M | $1.2B | $2.2B | $4.0B | $2.8B | $6.8B | $9.6B | $8.4B | $11.1B | $15.0B | +35.8% |
| Operating Income | -$68.6M | $605.0M | $1.0B | $695.0M | -$5.5B | $4.0B | $6.5B | $4.6B | $4.4B | $1.3B | -71.2% |
| Operating Margin | -13.0% | 50.2% | 46.5% | 17.5% | -194.7% | 58.9% | 67.5% | 54.3% | 39.7% | 8.4% | -31.3pp |
| Net Income | -$165.0M | $482.3M | $845.7M | $240.0M | -$4.5B | $2.2B | $4.4B | $3.1B | $3.3B | $1.7B | -50.1% |
| Net Margin | -31.3% | 40.0% | 38.9% | 6.1% | -160.6% | 32.1% | 45.5% | 37.4% | 30.2% | 11.1% | -19.1pp |
| Free Cash Flow | — | $866.2M | $1.6B | $2.7B | — | — | — | — | — | — | — |
| FCF Margin | — | 71.9% | 71.6% | 68.8% | — | — | — | — | — | — | — |
| EPS (Diluted) | $-2.20 | $4.94 | $8.06 | $1.47 | $-28.59 | $12.30 | $24.61 | $17.34 | $15.53 | $5.73 | -63.1% |
1. THE BIG PICTURE
Diamondback Energy is doubling down on its "pure-play" Permian Basin strategy, leading its peer group in revenue growth and shareholder returns even as it swings to a recent quarterly loss. While management is aggressively returning cash through buybacks and dividends, Diamondback Energy is effectively a levered bet on West Texas geology and global commodity prices.
2. WHERE THE RISKS HIT HARDEST
- Geographic Concentration vs. Regional Constraints: The operational efficiency gained from focusing solely on the Permian Basin (Business) is threatened by regional infrastructure constraints and weather events that can immediately curtail production and revenue (Risks).
- Capital Allocation vs. Indebtedness: Diamondback’s commitment to return 50% of Adjusted Free Cash Flow to stockholders (Business) is pressured by its $16.1 billion in net debt (Peer Benchmarking). This debt requires significant cash flow for interest and principal payments, which limits flexibility during price downturns (Risks).
- Drilling Program vs. Price Volatility: The intent to develop existing leaseholds (Business) faces a significant hurdle as realized oil prices dropped to $58.00 per Bbl in Q4 2025 (Recent Results). This price sits near the lower end of the $55.27 historical range that threatens the carrying value of Diamondback Energy's properties (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
Diamondback presents a paradox: it leads its peer group in TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth (35.8%) and net margins (26.4%), yet it reported a $1.46 billion net loss in the most recent quarter (Recent Results, Peer Benchmarking). This divergence is explained by a collapse in realized prices—natural gas fell to just $0.03 per Mcf—and a staggering compression in operating margins from 54.3% in 2023 to 8.4% in 2025 (Business, Recent Results). Despite this volatility, Diamondback maintains the highest buyback yield (4.1%) among its peers, signaling that management is prioritizing share retirements even as it faces a $3.6 billion to $3.9 billion capital expenditure budget for 2026 (Peer Benchmarking, Recent Results). Short interest stands at 5.1% of the float, suggesting a notable cohort of investors is betting against this capital-intensive strategy (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 14.1x, Diamondback trades exactly in line with the peer median (Peer Benchmarking). At this multiple, the market is pricing in a meager 0.5% long-term growth rate (Computed Valuation Context). Given that Diamondback Energy grew revenue by 35.8% over the last twelve months, the market is clearly discounting recent performance as unsustainable due to commodity price swings. If Diamondback can achieve even modest GDP-paced growth of 2.5%, the justified multiple would rise to 19.5x (Computed Valuation Context). However, the $16.1 billion debt load—the second highest in its peer group—justifies this cautious "at-par" valuation, as any further dip in oil prices would make the 4.1% buyback yield difficult to sustain (Peer Benchmarking, Risks).
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if realized natural gas prices remain near the $0.03 per Mcf level seen in Q4 2025, as this erodes the margin advantage Diamondback holds over peers like Occidental (Recent Results, Peer Benchmarking).
- Constructive if Diamondback Energy successfully hits its 2026 oil production target of 500-510 MBO/d while staying within the $3.6 billion to $3.9 billion CapExCapExCapital Expenditures — money spent on physical assets like factories, servers, or infrastructure budget, proving it can grow efficiently despite regional constraints (Recent Results).
- Cautious if the 5.1% short interest continues to climb, indicating growing market skepticism regarding the integration of future acquisitions (Supplemental Signals, Competitive Position).
6. BOTTOM LINE
Structural Advantage: Low-cost operational scale derived from extreme geographic density in the Permian Basin and a peer-leading 26.4% net margin. Bottom Line: Diamondback is a high-performing but high-risk operator that offers the best shareholder returns in its class, provided oil prices stay high enough to service its substantial debt.
1. Top 5 Material Risks
- Commodity Price Volatility: Fluctuations in oil and natural gas prices directly impact revenue, profitability, and the present value of estimated reserves. From 2023 through 2025, WTI prices ranged from $55.27 to $93.68 per Bbl, while Henry Hub natural gas prices ranged from $1.58 to $5.29 per MMBtu.
- Indebtedness: Diamondback Energy carries a substantial amount of debt to finance acquisitions and operations. This debt requires significant cash flow for interest and principal payments, limits the ability to fund strategic initiatives, and subjects Diamondback Energy to restrictive covenants that could trigger immediate repayment if breached.
- Geographic Concentration: Operations are concentrated in the Permian Basin of West Texas. This makes Diamondback Energy vulnerable to regional supply and demand factors, transportation capacity constraints, and extreme weather events that can curtail production.
- Capital Expenditure Requirements: The business is capital intensive, with 2025 cash capital expenditures of approximately $3.5 billion and a 2026 budget estimated between $3.60 billion and $3.90 billion. Failure to obtain financing on satisfactory terms could force a curtailment of operations and a decline in reserves.
- Reserve Estimates and Impairments: Reserve engineering involves subjective estimates; inaccuracies in these assumptions can materially affect the present value of reserves. In 2025, Diamondback Energy recorded an impairment of approximately $3.7 billion on its proved oil and natural gas properties.
2. Company-Specific Risks
- Endeavor Acquisition Influence: Following the Endeavor Acquisition, Endeavor equityholders hold approximately 35.8% of Diamondback Energy’s common stock and have the ability to significantly influence business decisions, potentially creating conflicts with other stockholders.
- Derivative Counterparty Risk: Diamondback Energy uses commodity derivatives to hedge production but does not require collateral from counterparties, exposing Diamondback Energy to credit risk if a counterparty fails to perform when the derivative position is positive.
- Proved Undeveloped Reserves: Approximately 30% of total estimated proved reserves as of December 31, 2025, are proved undeveloped, which may not be ultimately developed or produced due to capital constraints or uneconomical project results.
- Speculative Drilling Locations: As of December 31, 2025, Diamondback Energy identified approximately 1,901 horizontal drilling locations in intervals where very few or no wells have been drilled, making these locations more speculative than established areas.
3. Regulatory/Legal Risks
- Produced Water Disposal: The Texas Railroad Commission has curtailed injection volumes and suspended permits for produced water disposal wells in the Permian Basin to address induced seismic activity, which increases operating costs for Diamondback Energy.
- Climate Change Regulations: Evolving climate change-related regulations and policies may increase compliance costs, restrict access to capital, or reduce demand for hydrocarbons.
- Tax Legislation: Changes to U.S. tax laws, including the potential repeal of deductions for intangible drilling costs or percentage depletion, could adversely affect cash flow. While Diamondback Energy is subject to the 15% corporate alternative minimum tax (CAMT), it did not incur a liability for 2025.
- Exclusive Venue Provision: The certificate of incorporation and bylaws require the Court of Chancery of the State of Delaware to be the sole and exclusive forum for certain derivative actions and fiduciary duty claims, which may discourage lawsuits against Diamondback Energy and its officers.
4. Financial Impact Map
- Commodity Price Volatility → Revenue and Cash Flows → Prices directly dictate the realized value of production and the carrying value of properties.
- Substantial Indebtedness → Interest Expense and Cash Flow → High debt levels require a larger portion of cash flow for servicing, reducing funds available for capital expenditures.
- Geographic Concentration → Production Volumes → Regional interruptions or pipeline constraints directly reduce the volume of oil and gas sold.
- Capital Expenditure Requirements → Cash Flow from Operations → The need to fund a $3.60 billion to $3.90 billion 2026 budget competes with other uses of cash, such as dividends and share repurchases.
- Reserve Impairments → Oil and Natural Gas Properties (Asset Value) → The full cost ceiling limitation resulted in a $3.7 billion impairment charge in 2025.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Nov 2025 | Sep 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Diamondback Energy Q4 revenue $3.38B beats estimates by 2.6%, shares up 13% post-earnings
- ▸Diamondback Energy Q4 revenue $3.38B, down 9% YoY, beat estimates by 2.6%
- ▸Matador Resources Q4 revenue $848M, down 12.6% YoY, beat estimates by 4.7%
- ▸HighPeak Energy Q4 revenue $216.6M, down 23.3% YoY, beat estimates by 13.7%
- ▸U.S. shale E&P sector Q4 revenues beat consensus estimates by 2.2% aggregate
- ▸U.S. shale E&P stock prices rose 13.9% on average following Q4 earnings
Diamondback Energy consensus EPS estimates rise 59.5% for full year on analyst revisions
- ▸Full-year EPS consensus estimate increased 59.54% over the past 30 days
- ▸Current-quarter EPS estimate stands at $3.06, down 32.6% YoY
- ▸Full-year EPS estimate currently $14.88, up 11.3% YoY
- ▸Six upward revisions vs one downward revision for current-year estimates
- ▸Diamondback Energy currently holds a Zacks Rank #2 (Buy)
Diamondback Energy Q4 EPS $1.74 misses estimates, revenue $3.4B beats by 7%
- ▸Q4 adjusted EPS $1.74, missing consensus estimate of $1.88
- ▸Q4 revenue $3.4B, down 9% YoY but 7% above consensus
- ▸Production averaged 969,120 BOE/d, up 9.7% YoY
- ▸Quarterly dividend increased 5% sequentially to $1.05 per share
- ▸Repurchased 2.9 million shares for $434 million in Q4
Diamondback Energy shareholder SGF Fang launches $1.94 billion secondary share offering
- ▸SGF Fang Holdings offering 11 million shares of Diamondback Energy
- ▸Marketing price range $172.25–$176.00 per share
- ▸Potential proceeds up to $1.94 billion
- ▸Offering represents discount of up to 3.4% to Tuesday's closing price
- ▸Evercore, Citigroup, and JPMorgan Chase acting as lead underwriters
Diamondback Energy secondary offering of 11 million shares by SGF FANG Holdings announced
- ▸SGF FANG Holdings, LP launching secondary offering of 11 million common shares
- ▸Company receives zero proceeds from secondary share sale
- ▸Senior executives disclosed fresh insider selling activity
- ▸5.2 million shares repurchased by company between October 2025 and February 2026
- ▸Commitment to return at least 50% of quarterly free cash flow to shareholders
Diamondback Energy launches 11 million share follow-on offering post-Endeavor merger
- ▸11 million common shares offered in follow-on equity raise
- ▸Follows recent $26B merger with Endeavor Energy
- ▸Stock up 17.1% YTD, trading at $178.37
- ▸Capital intended for balance sheet flexibility and integration funding
- ▸Company maintains commitment to return 50% of quarterly FCF to shareholders
Diamondback Energy prices 11 million share secondary offering for $1.9 billion gross proceeds
- ▸11,000,000 shares priced for secondary offering by SGF FANG Holdings, LP
- ▸Gross proceeds of approximately $1.9 billion to selling stockholder
- ▸Diamondback Energy receives zero proceeds from the secondary offering
- ▸Underwriters granted 30-day option for additional 1,650,000 shares
- ▸Offering expected to close on March 12, 2026