Diamondback Energy (NASDAQ:FANG) Shares Gap Down - Here's Why

Key Points

• Diamondback Energy shares fell sharply, opening at $197.03 versus a prior close of $211.52 and later trading near $194.23. The stock was down about 8.9%, below its 50-day moving average but near its 200-day average.
• Despite the selloff, analysts maintain a generally positive outlook, with a consensus rating of “Moderate Buy” and an average price target of $224.55. The company also exceeded quarterly expectations, reporting $6.48 in EPS and $5.56 billion in revenue, up 51.2% year over year.
• Diamondback paid a quarterly dividend of $1.10 per share, equal to a 2.3% annualized yield, while two directors recently sold shares. Institutional investors remain heavily involved, owning approximately 90.01% of the company.

Diamondback Energy, Inc. (NASDAQ:FANG - Get Free Report)'s stock price gapped down before the market opened on Wednesday . The stock had previously closed at $211.52, but opened at $197.03. Diamondback Energy shares last traded at $194.2290, with a volume of 3,451,761 shares.

Wall Street Analysts Forecast Growth

Several brokerages have commented on FANG. Truist Financial increased their target price on Diamondback Energy from $220.00 to $224.00 and gave the company a "buy" rating in a research note on Wednesday, August 5th. Roth Capital set a $212.00 target price on Diamondback Energy and gave the company a "buy" rating in a research note on Monday, June 22nd. Morgan Stanley reaffirmed an "equal weight" rating and set a $216.00 price objective on shares of Diamondback Energy in a report on Wednesday, August 19th. Weiss Ratings raised shares of Diamondback Energy from a "hold (c-)" rating to a "hold (c)" rating in a research note on Friday, July 31st. Finally, Jefferies Financial Group restated a "hold" rating and issued a $205.00 price target on shares of Diamondback Energy in a report on Sunday, August 9th. Four analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and five have issued a Hold rating to the stock. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $224.55.

Diamondback Energy Stock Down 8.9%

The company's fifty day simple moving average is $199.05 and its 200-day simple moving average is $193.42. The company has a debt-to-equity ratio of 0.25, a current ratio of 0.47 and a quick ratio of 0.45. The firm has a market capitalization of $53.95 billion, a PE ratio of 37.61 and a beta of 0.43.

Diamondback Energy (NASDAQ:FANG - Get Free Report) last announced its earnings results on Monday, August 3rd. The oil and natural gas company reported $6.48 earnings per share (EPS) for the quarter, beating the consensus estimate of $6.08 by $0.40. The company had revenue of $5.56 billion for the quarter, compared to analyst estimates of $4.89 billion. Diamondback Energy had a return on equity of 10.10% and a net margin of 8.58%.The firm's quarterly revenue was up 51.2% compared to the same quarter last year. During the same period in the prior year, the company posted $2.38 EPS. On average, analysts forecast that Diamondback Energy, Inc. will post 19.94 EPS for the current year.

Diamondback Energy Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Thursday, August 20th. Investors of record on Thursday, August 13th were paid a $1.10 dividend. The ex-dividend date was Thursday, August 13th. This represents a $4.40 dividend on an annualized basis and a yield of 2.3%. Diamondback Energy's dividend payout ratio (DPR) is 85.77%.

Insider Activity

In related news, Director Travis Stice sold 75,000 shares of Diamondback Energy stock in a transaction dated Friday, September 11th. The stock was sold at an average price of $204.31, for a total transaction of $15,323,250.00. Following the completion of the sale, the director owned 49,727 shares of the company's stock, valued at $10,159,723.37. The trade was a 60.13% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, Director Charles Meloy sold 33,333 shares of Diamondback Energy stock in a transaction that occurred on Monday, August 3rd. The shares were sold at an average price of $198.41, for a total transaction of $6,613,600.53. Following the sale, the director owned 818,197 shares of the company's stock, valued at approximately $162,338,466.77. The trade was a 3.91% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.64% of the company's stock.

Institutional Trading of Diamondback Energy

Several hedge funds and other institutional investors have recently added to or reduced their stakes in FANG. BlackRock Inc. acquired a new stake in shares of Diamondback Energy during the 2nd quarter valued at about $3,303,362,000. Wellington Management Group LLP grew its position in shares of Diamondback Energy by 31.3% in the second quarter. Wellington Management Group LLP now owns 16,420,247 shares of the oil and natural gas company's stock valued at $2,886,351,000 after purchasing an additional 3,918,943 shares during the period. Geode Capital Management LLC grew its position in shares of Diamondback Energy by 0.3% in the fourth quarter. Geode Capital Management LLC now owns 5,621,120 shares of the oil and natural gas company's stock valued at $844,073,000 after purchasing an additional 14,625 shares during the period. Bank of New York Mellon Corp increased its stake in shares of Diamondback Energy by 11.5% during the fourth quarter. Bank of New York Mellon Corp now owns 5,159,365 shares of the oil and natural gas company's stock worth $775,607,000 after purchasing an additional 532,756 shares in the last quarter. Finally, Capital Research Global Investors raised its position in shares of Diamondback Energy by 14.1% during the 4th quarter. Capital Research Global Investors now owns 4,332,885 shares of the oil and natural gas company's stock worth $651,363,000 after purchasing an additional 534,073 shares during the last quarter. Institutional investors and hedge funds own 90.01% of the company's stock.

About Diamondback Energy

Diamondback Energy, Inc is an independent oil and natural gas company focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin of West Texas and southeastern New Mexico. The company's operations are concentrated primarily in the Midland and Delaware sub-basins.

Diamondback produces crude oil, natural gas and natural gas liquids. Its activities include drilling and completing horizontal wells, operating gathering and infrastructure assets, and managing mineral and royalty interests through its Viper Energy platform.

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