Underpriced Stock: Diamondback Energy Inc. (FANG) Undervalued by 43.9%

Publicly-traded company Diamondback Energy Inc. (NASDAQ:FANG) had a closing price of $77.20 yesterday. Meanwhile, the average 12-month price target from Wall Street analysts is currently $137.62, this means that the stock is underpriced by 43.9%. In the past 52 weeks the company’s stock price has moved within the range of $80.75 to $119.55.

This particular stock’s 5-day moving average is 86.07, its 20-day moving average is 85.18 and its 100-day moving average is 96.13. Diamondback Energy Inc. (FANG) currently has 164.84M shares outstanding, which means that its market capitalization is $12.73B.

The Details: Diamondback Energy Inc. (FANG) Financial Health

When considering a potential stock, there are multiple indicators we can take into consideration that give us an idea of the company’s financial health. Checking out a company’s profit margin, for instance, shows us how much of its net sales revenue it retains as earnings. This figure is determined by taking total income and dividing it by net sales. FANG currently has a profit margin of 26.90%.

Seeing a company’s operating margin is useful as well, as it lets us know how much profit the company keeps – after taking into account depreciation and its operating expenses. Diamondback Energy Inc. (FANG) has an operating margin of 39.00%.

We can also see what the current Return on Assets is for the company, which is a percentage that lets us know how well it is utilizing its net assets to turn a profit. The lower the percentage, the worse the company is making use of its assets. At the moment, Diamondback Energy Inc. Return on Assets is 4.30%.

What Does Wall Street Say about Company?

When investors are considering buying a new stock, they often want to know the general Wall Street consensus on the company – by checking out the average analyst rating, for instance. At the moment, the average analyst rating for FANG is Buy. Out of 39 total analysts who were surveyed, 0 rated it a sell, 0 rated it a underweight, 2 rated it an overweight, 0 rated it hold, and 37 rated it a Buy.

Three months ago, on the other hand, the average analyst rating for Diamondback Energy Inc. (FANG) was a Buy – from a survey of 38 analysts. Of the analysts who provided ratings, 0 rated the company a Hold, 0 rated it a Sell, 2 rated it an overweight, 0 rated it an underweight, and 36 rated it a Buy.

Understanding Profitability at Diamondback Energy Inc. (FANG)

Checking out a public company’s Earnings per Share (EPS) is a smart way of assessing its profitability. In the most recent financial results released by Diamondback Energy Inc., for the quarter ending on 12/2019, the company posted EPS of 1.92. The average estimate of Wall Street analysts had projected 2.24.

Wall Street analysts, on average, are forecasting the company’s EPS to be 1.76, compared to 1.21 reported in the same quarter last year. When it comes to net revenue, the average estimate from a total of 23 analysts is 1.15B – compared to 633.06M posted in the year-ago period.