Diamondback Energy Inc (NASDAQ:FANG): What’s The Analyst Consensus Outlook?
The most recent earnings update Diamondback Energy Inc’s (NASDAQ:FANG) released in December 2017 indicated that the company finally turned profitable after delivering losses on average over the past couple of years. Below, I’ve presented key growth figures on how market analysts view Diamondback Energy’s earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. Check out our latest analysis for Diamondback Energy
Analysts’ outlook for the upcoming year seems positive, with earnings expanding by a robust 41.03%. This growth seems to continue into the following year with rates arriving at double digit 95.57% compared to today’s earnings, and finally hitting US$1.19B by 2021.
While it’s helpful to be aware of the rate of growth year by year relative to today’s value, it may be more valuable to estimate the rate at which the company is growing on average every year. The advantage of this method is that we can get a better picture of the direction of Diamondback Energy’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 28.54%. This means that, we can anticipate Diamondback Energy will grow its earnings by 28.54% every year for the next couple of years.
Next Steps:
For Diamondback Energy, I’ve put together three pertinent factors you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is FANG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FANG is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FANG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
