MeritValue

Diamondback Energy, Inc.

FANGdata completeness 88%16 fiscal years on file

Data notes: no data for concept 'capex'

The thesis, from the filings

Diamondback Energy, Inc. earns about 9% on invested capital, but has diluted owners by 64% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $112.67 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$6.75B1$9.57B1$8.41B2$11.1B2$15B2
Net income$2.18B3$4.39B4$3.14B5$3.34B5$1.66B5
Operating cash flow$3.94B6$6.33B7$5.92B8$6.41B8$8.76B8
Capital expenditure—————
Free cash flow (derived)—————
Total debt$13.3B9$12.5B10$13.3B11$26B12$29B12
Cash & equivalents$654M13$157M14$582M15$161M16$104M16
Diluted shares176.6M176.5M180.0M213.5M289.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$1,278.96
your share of equity
Profit it earned you last year
$57.56
Free cash flow it threw off
—
Debt you’d be carrying
$1,002.42

10 shares is a claim on $1,278.96 of net worth that earned you $57.56 last year, against $1,002.42 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
9% avg · 5y
FY21 10%FY22 17%FY23 12%FY24 6%FY25 3%

It earned an average 9% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+64% shares · 5y

Share count is up 64% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 117% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$112.67
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$3.14B
  • growthAssumed0.0%
Graham Number
$128.41
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001539838-23-000022 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-12-31 · accession 0001539838-26-000010 (Revenues)
  3. 10-K · period ending 2021-12-31 · accession 0001539838-24-000019 (NetIncomeLoss)
  4. 10-K · period ending 2022-12-31 · accession 0001539838-25-000021 (NetIncomeLoss)
  5. 10-K · period ending 2023-12-31 · accession 0001539838-26-000010 (NetIncomeLoss)
  6. 10-K · period ending 2021-12-31 · accession 0001539838-24-000019 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2022-12-31 · accession 0001539838-25-000021 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-12-31 · accession 0001539838-26-000010 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2021-12-31 · accession 0001539838-23-000022 (LongTermDebtNoncurrent)
  10. 10-K · period ending 2022-12-31 · accession 0001539838-24-000019 (LongTermDebtNoncurrent)
  11. 10-K · period ending 2023-12-31 · accession 0001539838-25-000021 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2024-12-31 · accession 0001539838-26-000010 (LongTermDebtNoncurrent)
  13. 10-K · period ending 2021-12-31 · accession 0001539838-23-000022 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001539838-24-000019 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001539838-25-000021 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001539838-26-000010 (CashAndCashEquivalentsAtCarryingValue)