It has been about a month since the last earnings report for Diamondback Energy (FANG Quick QuoteFANG - Free Report) . Shares have added about 14.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Diamondback due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Diamondback Energy, Inc. before we dive into how investors and analysts have reacted as of late.

Diamondback Energy Q4 Earnings Miss, Revenues Beat Estimates

Diamondback Energy reported fourth-quarter 2025 adjusted earnings per share (EPS) of $1.74, which missed the Zacks Consensus Estimate of $1.88. Moreover, the company’s bottom line declined from the year-ago adjusted profit of $3.64. The underperformance was due to sharply lower year-over-year realized commodity prices — including a 16.5% drop in oil prices and a steep decline in natural gas prices.

Midland, TX-based oil and gas exploration and production company’s revenues of $3.4 billion declined 9% from the year-ago quarter’s sales, primarily due to lower sales of oil, natural gas and natural gas liquids. However, the metric topped the Zacks Consensus Estimate by 7%, driven by better-than-expected sales of purchased oil and other operating income, which exceeded the consensus mark by 45.1%.

In the fourth quarter of 2025, the company generated free cash flow of about $1 billion, while adjusted free cash flow stood at $1.2 billion. Over the same period, it bought back nearly 2.9 million common shares for roughly $434 million at an average price of $149.50 per share, excluding excise taxes. This included a $305 million transaction to repurchase 2 million shares from SGF FANG Holdings, LP.

Overall, shareholder returns totaled approximately $734 million through a combination of share repurchases and the declared base dividend for the quarter, accounting for 62% of adjusted free cash flow.

FANG’s board of directors declared a quarterly dividend of $1.05 per share to its common shareholders of record on Feb. 20. The payout, which represents a 5% sequential increase from the previous quarter, will be made on March 12, 2026.

At the same time, the firm improved its financial position by repurchasing $203 million of senior notes maturing in 2051 and 2052 at 82.3% of face value, or nearly $167 million. It also repaid $950 million of its $1.5 billion term loan due in 2027, leaving an outstanding balance of $550 million.

Production & Realized Prices

FANG’s production of oil and natural gas averaged 969,120 barrels of oil equivalent per day (BOE/d), comprising 52.9% oil.The figure was up 9.7% from the year-ago quarterand beat our estimate of 947,927.5 BOE/d. While crude and natural gas output increased 7.7% and 13.6% year over year, respectively, natural gas liquids volumes surged 10.5%.

The average realized oil price during the quarter was $58 per barrel, 16.5% lower than the year-ago realization of $69.48.However, the figure beat our estimate of $51.10 per barrel.Meanwhile, the average realized natural gas price decreased to 3 cents per thousand cubic feet from 48 cents in the prior year.The figure was also below our estimate of $1.02.Overall, the upstream oil and gas company fetched $34.02 per barrel compared with $42.71 a year ago.

Costs & Financial Position

Diamondback Energy’s fourth-quarter cash operating cost was $10.31 per BOE compared with $10.30 in the prior-year quarter andour estimate of $11.99.The increase in costs compared with the year-ago period reflected a rise in lease operating expenses to $5.91 per BOE from $5.67 in the fourth quarter of 2024.

Further, FANG’s gathering, processing and transportation expenses increased 31.6% year over year to $1.54 per BOE. However, cash G&A expenses fell in the fourth quarter of 2025 to 65 cents per BOE from 69 cents in the corresponding period of 2024. Moreover, production and ad valorem taxes declined 20.2% year over year to $2.21 per BOE.

Diamondback Energy logged $943 million in capital expenditure — spending $748 million on drilling and completion, $130 million on infrastructure and environment and $65 million on capital workovers. The company booked $1.2 billion in adjusted free cash flow in the fourth quarter.

As of Dec. 31, the Permian-focused operator had approximately $104 million in cash and cash equivalents and $13.7 billion in long-term debt, representing a debt-to-capitalization of 24.2%.

FANG’s Q4 & 2025 Guidance

Diamondback Energy expects its full-year 2026 oil production guidance to be 500-510 thousand barrels of oil per day (MBO/d). The company anticipates its annual BOE will increase to a range of 926-962 thousand barrels of oil equivalent per day. The company expects full-year 2026 cash capital expenditures to be between $3.6 billion and $3.9 billion.

This guidance includes approximately $100 million to $150 million allocated to exploratory development in the Barnett/Woodford, as well as multiple tests aimed at increasing oil recoveries from the existing asset base. The company also expects to complete between 5.9 million and 6.3 million net lateral feet in 2026.

For the first quarter of 2026, the company expects oil production of 502-512 MBO/d and cash capital expenditures of $900 million to $975 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted 23.36% due to these changes.

VGM Scores

Currently, Diamondback has a average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions looks promising. Interestingly, Diamondback has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Diamondback belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT Quick QuoteEQT - Free Report) , has gained 11.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.

EQT reported revenues of $2.09 billion in the last reported quarter, representing a year-over-year change of +15%. EPS of $0.90 for the same period compares with $0.69 a year ago.

EQT is expected to post earnings of $2.08 per share for the current quarter, representing a year-over-year change of +76.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +37.7%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for EQT. Also, the stock has a VGM Score of C.