Back to top

Image: Bigstock

Diamondback Energy (FANG) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

In the latest trading session, Diamondback Energy (FANG - Free Report) closed at $75.66, marking a +1.29% move from the previous day. This move outpaced the S&P 500's daily loss of 0.46%.

Prior to today's trading, shares of the energy exploration and production company had lost 5.46% over the past month. This has lagged the Oils-Energy sector's loss of 0.85% and the S&P 500's gain of 1.93% in that time.

Wall Street will be looking for positivity from FANG as it approaches its next earnings report date. On that day, FANG is projected to report earnings of $2.64 per share, which would represent year-over-year growth of 325.81%. Our most recent consensus estimate is calling for quarterly revenue of $1.48 billion, up 106.1% from the year-ago period.

FANG's full-year Zacks Consensus Estimates are calling for earnings of $9.89 per share and revenue of $5.48 billion. These results would represent year-over-year changes of +225.33% and +94.88%, respectively.

Investors should also note any recent changes to analyst estimates for FANG. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.32% higher within the past month. FANG is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, FANG is currently trading at a Forward P/E ratio of 7.55. Its industry sports an average Forward P/E of 8.85, so we one might conclude that FANG is trading at a discount comparatively.

We can also see that FANG currently has a PEG ratio of 0.34. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Exploration and Production - United States was holding an average PEG ratio of 0.5 at yesterday's closing price.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 34, which puts it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Diamondback Energy, Inc. (FANG) - free report >>

Published in