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Diamondback Energy (FANG) Exceeds Market Returns: Some Facts to Consider

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Diamondback Energy (FANG - Free Report) closed the most recent trading day at $151.94, moving +0.58% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.22% for the day. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.32%.

The energy exploration and production company's shares have seen a decrease of 3.41% over the last month, surpassing the Oils-Energy sector's loss of 5.7% and falling behind the S&P 500's gain of 1.61%.

Investors will be eagerly watching for the performance of Diamondback Energy in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 20, 2024. The company's upcoming EPS is projected at $5.24, signifying a 0.95% drop compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $2.24 billion, showing a 10.38% escalation compared to the year-ago quarter.

Investors should also note any recent changes to analyst estimates for Diamondback Energy. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 6.69% lower. At present, Diamondback Energy boasts a Zacks Rank of #3 (Hold).

Digging into valuation, Diamondback Energy currently has a Forward P/E ratio of 7.74. This expresses a premium compared to the average Forward P/E of 7.4 of its industry.

It's also important to note that FANG currently trades at a PEG ratio of 0.35. 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. FANG's industry had an average PEG ratio of 0.59 as of yesterday's close.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. At present, this industry carries a Zacks Industry Rank of 247, placing it within the bottom 2% of over 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.


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