December 28, 2023
Top 10 Stock Diamondback Energy Buy Recommendation

Latest Research

For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Diamondback Energy Buy

360 METRICS	December 28, 2023
VALUE
VALUE	23
GROWTH
GROWTH	57
SAFETY
SAFETY	66
SENTIMENT
SENTIMENT	69
360° VIEW
360° VIEW	56

ANALYSIS: With an Obermatt 360° View of 56 (better than 56% compared with alternatives), overall professional sentiment and financial characteristics for the stock Diamondback Energy are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Diamondback Energy. The consolidated Growth Rank has a good rank of 57, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 57% of competitors in the same industry. The consolidated Safety Rank at 66 means that the company has a financing structure that is safer than 66% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 69, which means that professional investors are more optimistic about the stock than for 69% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 23, meaning that the share price of Diamondback Energy is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 77% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 56, Diamondback Energy is better positioned than 56% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 57), a safe financing structure (Safety Rank of 66), and positive professional market sentiment (Sentiment Rank of 69), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Diamondback Energy compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (57% better than peers). The value rank could be the reverse reflection of that (43%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

---

Sentiment Strategy: Professional Market Sentiment for Diamondback Energy positive

SENTIMENT METRICS	December 28, 2023
ANALYST OPINION
ANALYST OPINION	76
OPINIONS CHANGE
OPINIONS CHANGE	49
PRO HOLDINGS
PRO HOLDINGS	39
MARKET PULSE
MARKET PULSE	67
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	69

ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Diamondback Energy is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Diamondback Energy. Analyst Opinions are at a rank of 76 (better than 76% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 67, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 67% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 49, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Diamondback Energy. There are also only so many institutional investors holding company stock with a Professional Investors rank of 39, which means that, currently, professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), Diamondback Energy has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more

---

Value Strategy: Diamondback Energy Stock Price Value low

VALUE METRICS	December 28, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	11
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	46
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	46
DIVIDEND YIELD
DIVIDEND YIELD	54
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	23

ANALYSIS: With an Obermatt Value Rank of 23 (worse than 77% compared with alternatives), Diamondback Energy shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Diamondback Energy. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 54% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Diamondback Energy's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 46 which means that the stock price compared with what market professionals expect for future profit levels is higher than 54% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 46 is also low. Compared with invested capital, the stock price is higher than for 54% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 23, is a sell recommendation based on Diamondback Energy's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Diamondback Energy? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Diamondback Energy only if they reasonably expect the low current profit levels to be transitory. ...read more

---

Growth Strategy: Diamondback Energy Growth Momentum good

GROWTH METRICS	December 28, 2023
REVENUE GROWTH
REVENUE GROWTH	25
PROFIT GROWTH
PROFIT GROWTH	80
CAPITAL GROWTH
CAPITAL GROWTH	23
STOCK RETURNS
STOCK RETURNS	93
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	57

ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Diamondback Energy shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Diamondback Energy. Profit Growth has a rank of 80, which means that currently professionals expect the company to grow its profits more than 80% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 93 (above 93% of alternative investments). But Sales Growth has a below the median rank of 25, which means that, currently, professionals expect the company to grow less than 75% of its competitors, and Capital Growth also has a lower rank of 23. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Diamondback Energy. ...read more

---

Safety Strategy: Diamondback Energy Debt Financing Safety above-average

SAFETY METRICS	December 28, 2023
LEVERAGE
LEVERAGE	48
REFINANCING
REFINANCING	56
LIQUIDITY
LIQUIDITY	81
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	66

ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Diamondback Energy has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Diamondback Energy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Diamondback Energy. Refinancing is at 56, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 56% of its competitors. Liquidity is also good at 81, meaning the company generates more profit to service its debt than 81% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 48, which means the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), Diamondback Energy has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Diamondback Energy could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more

---

Combined financial peformance: Diamondback Energy Below-Average Financial Performance

COMBINED PERFORMANCE	December 28, 2023
VALUE
VALUE	23
GROWTH
GROWTH	57
SAFETY
SAFETY	81
COMBINED
COMBINED	42

ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Diamondback Energy (Oil & Gas Production, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Diamondback Energy are low in value (priced high) with a consolidated Value Rank of 23 (worse than 77% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 66, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Diamondback Energy's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Diamondback Energy exhibits low value (Obermatt Value Rank of 23), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 66) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.