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

Zacks Equity Research

Diamondback Energy (FANG) closed at $79.12 in the latest trading session, marking a -0.31% move from the prior day. This change lagged the S&P 500's daily gain of 1.01%. Elsewhere, the Dow gained 0.66%, while the tech-heavy Nasdaq added 1.43%.

Coming into today, shares of the energy exploration and production company had lost 12.85% in the past month. In that same time, the Oils-Energy sector lost 5.65%, while the S&P 500 gained 0.19%.

Investors will be hoping for strength from FANG as it approaches its next earnings release, which is expected to be February 18, 2020. On that day, FANG is projected to report earnings of $1.81 per share, which would represent year-over-year growth of 49.59%. Meanwhile, our latest consensus estimate is calling for revenue of $1.09 billion, up 71.57% from the prior-year quarter.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 7.27% higher. FANG is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, FANG is holding a Forward P/E ratio of 8.56. Its industry sports an average Forward P/E of 9.32, so we one might conclude that FANG is trading at a discount comparatively.

Also, we should mention that FANG has a PEG ratio of 0.69. 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 industry currently had an average PEG ratio of 0.76 as of yesterday's close.

The Oil and Gas - Exploration and Production - United States industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 60, putting it in the top 24% 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.

To follow FANG in the coming trading sessions, be sure to utilize Zacks.com.


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