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Diamondback Energy (FANG) Gains But Lags Market: What You Should Know

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In the latest trading session, Diamondback Energy (FANG - Free Report) closed at $147.55, marking a +0.76% move from the previous day. This change lagged the S&P 500's 1.89% gain on the day. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq added 10%.

Coming into today, shares of the energy exploration and production company had gained 10.2% in the past month. In that same time, the Oils-Energy sector gained 5.98%, while the S&P 500 gained 2.3%.

Investors will be hoping for strength from Diamondback Energy as it approaches its next earnings release, which is expected to be February 21, 2023. On that day, Diamondback Energy is projected to report earnings of $5.87 per share, which would represent year-over-year growth of 61.71%. Our most recent consensus estimate is calling for quarterly revenue of $2.2 billion, up 8.82% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Diamondback Energy. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Within the past 30 days, our consensus EPS projection has moved 3.5% lower. Diamondback Energy is currently a Zacks Rank #3 (Hold).

In terms of valuation, Diamondback Energy is currently trading at a Forward P/E ratio of 6.08. Its industry sports an average Forward P/E of 5.23, so we one might conclude that Diamondback Energy is trading at a premium comparatively.

It is also worth noting that FANG currently has a PEG ratio of 0.28. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Oil and Gas - Exploration and Production - United States industry currently had an average PEG ratio of 0.2 as of yesterday's close.

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 233, which puts it in the bottom 8% 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.

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