Diamondback Energy, Inc. (FANG) DCF Valuation
TGM's two-stage DCF values Diamondback Energy, Inc. (FANG) between $146.57 and $322.33 depending on assumptions, with a base case of $220.20. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use) (capped at 18%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$179.91 is justified only if free cash flow grows about +14.1% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 8.5% | $146.57 |
| Base case | 18.0%/yr | 7.5% | $220.20 |
| Optimistic | 20.0%/yr | 6.5% | $322.33 |
| Analyst DCF (FMP) | independent reference — different model | $91.29 | |
Current Price
$179.91
Market-Implied Growth
+14.1%/yr
vs +37.4% 5Y actual
Model Scenario Range
$146.57 – $322.33
model output — not a price target
FANG DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for FANG (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.0B · 0.28B shares · net debt $14.8B
Estimated Fair Value
$430.48
+139.3% vs $179.91
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $179.91; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $625 | $705 | $812 | $962 | $1187 |
| 6.5% | $469 | $515 | $573 | $647 | $745 |
| 7.5% | $367 | $396 | $430 | $473 | $526 |
| 8.5% | $295 | $314 | $337 | $363 | $395 |
| 9.5% | $242 | $255 | $270 | $288 | $309 |
About Diamondback Energy, Inc.
Diamondback Energy, Inc. operates as an independent enterprise focused on oil and natural gas. Its core business involves the acquisition, development, exploration, and production of unconventional and onshore hydrocarbon reserves, predominantly located within the Permian Basin across West Texas and New Mexico. The company's development efforts primarily target significant geological formations, including the Spraberry and Wolfcamp in the Midland Basin, as well as the Wolfcamp and Bone Spring within the Delaware Basin – both crucial components of the broader Permian. As of December 31, 2021, Diamondback Energy's asset base included approximately 524,700 gross acres under its control in the Permian Basin. At that time, its estimated proved oil and natural gas reserves amounted to 1,788,991 thousand barrels of crude oil equivalent. The company also maintained working interests in 5,289 gross producing wells and held royalty interests in an additional 6,455 wells. Beyond its direct well operations, Diamondback Energy possesses mineral interests spanning roughly 930,871 gross acres and 27,027 net royalty acres across the Permian Basin and the Eagle Ford Shale. Furthermore, it manages a portfolio of midstream infrastructure, owning, operating, developing, and acquiring assets such as 866 miles of crude oil gathering pipelines, natural gas gathering pipelines, and an integrated water system within the Midland and Delaware Basins of the Permian. Established in 2007, Diamondback Energy, Inc. is headquartered in Midland, Texas.
- Sector
- Energy
- Industry
- Oil & Gas Exploration & Production
- CEO
- Matthew Kaes Van't Hof