Diamondback Energy, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Diamondback Energy trades at 37.5x trailing earnings — a 228% premium to the peer median of 11.4x — despite gross margins compressing from 70.1% in FY2022 to 35.2% in FY2025 and total debt nearly doubling to $14.9B since FY2023.
Q2 2026 showed genuine operational improvement with revenue of $5.56B (up 52.3% YoY) and EPS of $6.65 beating estimates by 6.6%, and FCF margin recovered to 34.8% in FY2025, but the TTM EPS profile is distorted by a Q4 2025 net loss of $1.46B and a near-zero Q1 2026 EPS of $0.08. Relentless insider selling — 106 dispositions totaling $7.05B net over 24 months with zero acquisitions, including SGF FANG Holdings' $1.86B sale on September 16 — is a persistent overhang that offsets the improving quarterly trajectory and supportive oil prices near $90.
What could go wrong
- Valuation compression. FANG's PE of 37.5x is 228% above the peer median of 11.4x; any normalization toward peers could drive significant downside even if fundamentals improve.
- Persistent insider selling. Over 24 months, insiders have made zero acquisitions and 106 dispositions totaling $7.05B net, including SGF FANG Holdings' $1.86B sale on 16 Sep and CEO Meloy's sales on 5 Oct.
- Margin and leverage deterioration. Gross margin fell from 70.1% (FY2022) to 35.2% (FY2025) while total debt rose from $6.4B to $14.9B, reflecting acquisition-driven dilution of profitability.
- Q3 2026 derivative loss. FANG flagged a $97M cash-settlement derivative loss for Q3 2026 on 10 Oct, which could pressure the upcoming earnings release on November 2.
What would change my mind
Where this comes from: peer comparison · fundamentals · FY22 and FY25 fundamentals · Q2 2026 results and earnings vs estimates. Orin's read on FANG; not advice.
How has the share price moved?
Up 41.6% over twelve months, from $144.40 on 27 Oct 2025 to $204.48 at the Tue 27 Oct 2026 close. Its highest close in that time was $213.69 on 4 May 2026; the last close is 4.3% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 15.4M, on 16 Sep 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All FANG filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $3.3B | 0.0% |
| Wellington Management Group | $2.9B | 0.5% |
| Vanguard Capital Management | $2.2B | 0.0% |
| State Street | $2.2B | 0.1% |
| Invesco | $2.0B | 0.2% |
| Vanguard Portfolio Management | $1.7B | 0.1% |
| Capital World Investors | $1.6B | 0.2% |
| Geode Capital Management | $943.4M | 0.1% |
| Bank of New York Mellon | $852.8M | 0.1% |
| FMR | $807.6M | 0.0% |
106 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 186 Form 4 filings; open-market trades net −$8.9B. Of the 50 on hand, 0 were open-market purchases and 43 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about FANG
Orin answers questions about FANG from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 39.9× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 8.9×); the typical Energy company on the NASDAQ is at 15.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 39.9×above usual | 8.9× | 15.1× |
| P/S | 3.35×above usual | 2.89× | — |
| EV/EBITDA | 9.7×above usual | 5.8× | — |
| P/B | 1.5×near usual | 1.6× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $234 (from $206 to $255) — 15% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$234
$206 – $255 · +15% against the last close
- 11 buy or overweight
- 3 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 39.9× its last 12 months of profit; the middle P/E of the 4 companies it is compared to that made a profit is 9.8×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| FANGDiamondback Energy, Inc. | $57B | 39.9× | 9.7× | 44.5% | 9.3% | 4% |
| COPConocoPhillips | $163B | 14.2× | 5.8× | 34.7% | 17.1% | 18% |
| DVNDevon Energy Corporation | $47B | 10.1× | 6.6× | 34.0% | 16.7% | 15% |
| EOGEOG Resources, Inc. | $76B | 9.3× | 4.1× | 57.2% | 28.0% | 26% |
| OXYOccidental Petroleum Corporation | $63B | 9.4× | 5.2× | 43.4% | 28.8% | 19% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 39.9× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now39.9×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Energy companies on the NASDAQ were priced at a typical 15.1× their yearly profit (Tue 27 Oct close).
- Now15.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $67 a share — 67% below the $204.48 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $67 | 67% below $204.48 |
| Levered | $271 | 33% above $204.48 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.