Key Stats for Diamondback Energy Stock
- Price change for Diamondback Energy stock: -0.4%
- $FANG Share Price as of Feb. 23: $174
- 52-Week High: $177
- $FANG Stock Price Target: $182
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What Happened?
Diamondback Energy stock (NASDAQ: FANG) dropped marginally after the Permian Basin oil producer missed fourth-quarter earnings expectations, though revenue came in ahead of estimates.
- The company reported adjusted earnings of $1.74 per share for Q4 2025, falling short of the consensus estimate of $1.88 per share.
- This marks an earnings miss of about 7%, breaking a streak of three consecutive quarterly beats.
- Last year’s fourth quarter saw earnings of $3.64 per share, though that comparison isn’t entirely meaningful given the company’s major acquisitions since then.
- Revenue totaled $3.38 billion, topping expectations of $3.16 billion by about 7%. This marked the third quarter Diamondback has beaten revenue estimates in last four quarters.
- Compared to $3.71 billion in the year-ago period, revenue was down, but the company has undergone significant portfolio changes with its acquisition of Endeavor Energy in late 2024.
- The earnings miss appears to be weighing on Diamondback Energy stock despite some positive developments the company highlighted during its earnings call.
- CEO Kaes Van’t Hof spent much of the call discussing the company’s expansion into the Barnett Shale, a resource play that sits below Diamondback’s existing Permian Basin acreage.
According to Chief Engineer Al Barkmann, Barnett wells are delivering about 50% more oil on a per-foot basis in the first 12 months compared to Diamondback’s core Midland Basin development.
The wells have an estimated ultimate recovery of about 75 barrels of oil equivalent per foot versus 50 for the core zones.
The challenge is cost. Barnett wells currently run about $1,000 per lateral foot compared to roughly $550 for core Midland development. Management believes it can get Barnett costs down to around $800 per foot. At that cost level, the returns would be competitive with the core business.
Van’t Hof emphasized that only $150 million of Diamondback’s $3.75 billion capital budget is allocated to the Barnett in 2026, with plans to ramp up in the second half of the year and more aggressively in 2027.
The company expects to drill about 30 Barnett wells this year and potentially 100 next year.
Beyond the Barnett, Diamondback also discussed promising tests with surfactant treatments designed to boost production from existing wells. The company ran 60 surfactant trials in the second half of 2025, with some wells showing production increases of several hundred barrels per day. At about $500,000 per treatment, these projects deliver strong returns if successful.
The company reported strong operational performance in its core business. Completed feet per day on continuous pumping operations reached 4,500 feet, with some runs exceeding 5,500 feet per day. Average lateral lengths increased by about 600 feet in 2025, which is meaningful at Diamondback’s scale.
Looking ahead, analysts expect Diamondback to earn $2.08 per share on revenue of $3.24 billion in the first quarter of 2026. For the full fiscal year, the consensus calls for earnings of $9.05 per share on revenue of $13.35 billion.
The company ended the quarter with a strong balance sheet and generated solid free cash flow. Management authorized a stock buyback program and continues to return significant capital to shareholders.
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What the Market Is Telling Us About Diamondback Energy Stock
The modest sell-off in Diamondback Energy stock suggests investors are focused on the near-term earnings miss rather than the longer-term potential from Barnett development. The market may also be digesting concerns about oil prices and the overall supply-demand outlook for 2026.
Diamondback Energy stock is still up over 14% year to date, outperforming the broader market’s roughly flat performance. The company’s position as one of the lowest-cost producers in the Permian Basin, combined with its resource expansion efforts and commitment to shareholder returns, keeps it well-positioned for long-term value creation.
For investors, the Barnett opportunity adds meaningful inventory life and potential for future growth, though it will take time to fully develop. The company’s disclosure that it now has nearly two decades of drilling inventory at the current pace provides visibility into sustained operations.
The key for Diamondback Energy stock will be demonstrating it can reduce Barnett costs as promised while maintaining strong execution in its core Midland Basin operations.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
