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Understanding Diamondback Energy Inc. (NASDAQ: FANG)’s Growth Potential

Diamondback Energy Inc. (NASDAQ:FANG) shares, rose in value on Friday, May 13, with the stock price up by 5.66% to the previous day’s close as strong demand from buyers drove the stock to $134.23.

Actively observing the price movement in the recent trading, the stock is buoying the session at $127.04, falling within a range of $121.83 and $127.68. The value of beta (5-year monthly) is 2.29 whereas the PE ratio is 8.36 over 12-month period. Referring to stock’s 52-week performance, its high was $145.31, and the low was $64.74. On the whole, FANG has fluctuated by -7.04% over the past month.

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With the market capitalization of Diamondback Energy Inc. currently standing at about $21.87 billion, investors are eagerly awaiting this quarter’s results, scheduled for Aug 01, 2022 – Aug 05, 2022. The company’s Forward Dividend Ratio is 2.80, with its dividend yield at 2.20%. As a result, investors might want to see an improvement in the stock’s price before the company announces its earnings report. Analysts are projecting the company’s earnings per share (EPS) to be $6.21, which is expected to increase to $7.58 for fiscal year $23.67 and then to about $21.41 by fiscal year 2023. Data indicates that the EPS growth is expected to be 108.90% in 2023, while the next year’s EPS growth is forecast to be -9.50%.

Analysts have estimated the company’s revenue for the quarter at $2.33 billion, with a low estimate of $2.18 billion and a high estimate of $2.47 billion. According to the average forecast, sales growth in current quarter could jump up 72.50%, compared to the corresponding quarter of last year. Wall Street analysts also predicted that in 2023, the company’s y-o-y revenues would reach $9.18 billion, representing an increase of 35.00% from the revenues reported in the last year’s results.

Revisions could be a useful indicator to get insight on short-term price movement; so for the company, there were 5 upward and no downward review(s) in last seven days. We see that FANG’s technical picture suggests that short-term indicators denote the stock is a 50% Buy on average. However, medium term indicators have put the stock in the category of 50% Buy while long term indicators on average have been pointing out that it is a 100% Buy.

34 analyst(s) have assigned their ratings of the stock’s forecast evaluation on a scale of 1.00-5.00 to indicate a strong buy to a strong sell recommendation. The stock is rated as a Hold by 5 analyst(s), 26 recommend it as a Buy and 3 called the FANG stock Overweight. In the meantime, 0 analyst(s) believe the stock as Underweight and 0 think it is a Sell. Thus, investors eager to increase their holdings of the company’s stock will have an opportunity to do so as the average rating for the stock is Buy.

The stock’s technical analysis shows that the PEG ratio is about 0.48, with the price of FANG currently trading nearly 2.66% and 1.31% away from the simple moving averages for 20 and 50 days respectively. The Relative Strength Index (RSI, 14) currently indicates a reading of 52.82, while the 7-day volatility ratio is showing 6.66% which for the 30-day chart, stands at 5.23%. Furthermore, Diamondback Energy Inc. (FANG)’s beta value is 2.19, and its average true range (ATR) is 7.22. The company’s stock has been forecasted to trade at an average price of $178.28 over the course of the next 52 weeks, with a low of $145.00 and a high of $233.00. Based on these price targets, the low is -8.02% off current price, whereas the price has to move -73.58% to reach the yearly target high. Additionally, analysts’ median price of $171.50 is likely to be welcomed by investors because it represents a decrease of -27.77% from the current levels.

A comparison of Diamondback Energy Inc. (FANG) with its peers suggests the former has fared considerably weaker in the market. FANG showed an intraday change of 5.66% in today’s session so far, and over the past year, it grew by 69.79%%. In comparison, EOG Resources Inc. (EOG) has moved higher at 3.79% today and is up 58.28% over the past 12 months. On the other hand, the price of Pioneer Natural Resources Company (PXD) has risen 3.65% today. The stock, however, is off 72.77% from where it was a year ago. Additionally, there is a gain of 5.32% for Devon Energy Corporation (DVN) in recent trading while the stock has seen an overall depriciation of 175.63%% over the past year. The PE ratio stands at 8.36 for Diamondback Energy Inc., compared to 16.07 for EOG Resources Inc., and 15.37 for Pioneer Natural Resources Company. Other than that, the overall performance of the S&P 500 during the today’s session so far shows that it gained 2.22%. Meanwhile, the Dow Jones Industrial Improved by 1.49%.

Data on historical trading for Diamondback Energy Inc. (NASDAQ:FANG) indicates that the trading volumes over the past 3 months, they’ve averaged 2.73 million. According to company’s latest data on outstanding shares, there are 177.56 million shares outstanding.

Nearly 0.20% of Diamondback Energy Inc.’s shares belong to company insiders and institutional investors own 90.80% of the company’s shares. The stock has risen by 19.96% since the beginning of the year, thereby showing the potential of a further growth. This could raise investors’ confidence to be optimistic about the FANG stock heading into the next quarter.

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