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FANG (Diamondback Energy) Altman Z-Score : 2.84 (As of Oct. 31, 2024)


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What is Diamondback Energy Altman Z-Score?

The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.

Warning Sign:

Altman Z-score of 2.84 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

Diamondback Energy has a Altman Z-Score of 2.84, indicating it is in Grey Zones. This implies that Diamondback Energy is in some kind of financial stress. If it is below 1.81, the company may face bankrupcy risk.

The zones of discrimination were as such:

When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.

The historical rank and industry rank for Diamondback Energy's Altman Z-Score or its related term are showing as below:

FANG' s Altman Z-Score Range Over the Past 10 Years
Min: -0.67   Med: 2.46   Max: 6.17
Current: 2.84

During the past 13 years, Diamondback Energy's highest Altman Z-Score was 6.17. The lowest was -0.67. And the median was 2.46.


Diamondback Energy Altman Z-Score Historical Data

The historical data trend for Diamondback Energy's Altman Z-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Diamondback Energy Altman Z-Score Chart

Diamondback Energy Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Altman Z-Score
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.30 -0.65 1.81 2.54 2.33

Diamondback Energy Quarterly Data
Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24
Altman Z-Score Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.12 2.41 2.33 2.73 2.28

Competitive Comparison of Diamondback Energy's Altman Z-Score

For the Oil & Gas E&P subindustry, Diamondback Energy's Altman Z-Score, along with its competitors' market caps and Altman Z-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Diamondback Energy's Altman Z-Score Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Diamondback Energy's Altman Z-Score distribution charts can be found below:

* The bar in red indicates where Diamondback Energy's Altman Z-Score falls into.



Diamondback Energy Altman Z-Score Calculation

Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

Diamondback Energy's Altman Z-Score for today is calculated with this formula:

Z=1.2*X1+1.4*X2+3.3*X3+0.6*X4+1.0*X5
=1.2*0.1596+1.4*0.0894+3.3*0.1372+0.6*3.0244+1.0*0.2603
=2.84

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.

Trailing Twelve Months (TTM) ended in Jun. 2024:
Total Assets was $35,637 Mil.
Total Current Assets was $7,825 Mil.
Total Current Liabilities was $2,137 Mil.
Retained Earnings was $3,187 Mil.
Pre-Tax Income was 1146 + 1032 + 1275 + 1269 = $4,722 Mil.
Interest Expense was -44 + -46 + -37 + -41 = $-168 Mil.
Revenue was 2482 + 2228 + 2228 + 2340 = $9,278 Mil.
Market Cap (Today) was $51,748 Mil.
Total Liabilities was $17,110 Mil.

* Note that for stock reported semi-annually or annually, GuruFocus uses latest annual data as the TTM data.

X1=Working Capital/Total Assets
=(Total Current Assets - Total Current Liabilities)/Total Assets
=(7825 - 2137)/35637
=0.1596

X2=Retained Earnings/Total Assets
=3187/35637
=0.0894

X3=Earnings Before Interest and Taxes/Total Assets
=(Pre-Tax Income - Interest Expense)/Total Assets
=(4722 - -168)/35637
=0.1372

X4=Market Value Equity/Book Value of Total Liabilities
=Market Cap/Total Liabilities
=51748.096/17110
=3.0244

X5=Revenue/Total Assets
=9278/35637
=0.2603

The zones of discrimination were as such:

Distress Zones - 1.81 < Grey Zones < 2.99 - Safe Zones

Diamondback Energy has a Altman Z-Score of 2.84 indicating it is in Grey Zones.

Study by Altman found that companies that are in Distress Zone have more than 80% of chances of bankruptcy in two years.


Diamondback Energy  (NAS:FANG) Altman Z-Score Explanation

X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.

X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.

X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.

X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.

X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.

Read more about Altman Z-Score and the original research.


Be Aware

Altman Z-Score does not apply to financial companies.


Diamondback Energy Altman Z-Score Related Terms

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Diamondback Energy Business Description

Address
500 West Texas Avenue, Suite 1200, Midland, TX, USA, 79701
Diamondback Energy is an independent oil and gas producer in the United States. The company operates exclusively in the Permian Basin. At the end of 2023, the company reported net proven reserves of 2.2 billion barrels of oil equivalent. Net production averaged about 448,000 barrels per day in 2023, at a ratio of 59% oil, 21% natural gas liquids, and 20% natural gas.
Executives
Teresa L. Dick officer: CFO, Exec. VP, Assist. Sec. 500 WEST TEXAS, SUITE 1225, MIDLAND TX 79701
Van't Hof Matthew Kaes officer: Sr. VP - Strategy & Corp Dev 500 WEST TEXAS, SUITE 1200, MIDLAND TX 79701
Daniel N Wesson officer: Exec. VP - Operations 500 WEST TEXAS AVENUE, SUITE 1200, MIDLAND TX 79701
Matt Zmigrosky officer: Exec. VP and General Counsel 500 WEST TEXAS AVENUE, SUITE 1200, MIDLAND TX 79701
Travis D. Stice director, officer: Chief Executive Officer 500 WEST TEXAS, SUITE 1225, MIDLAND TX 79701
David L Houston director 14313 NORTH MAY AVENUE, OKLAHOMA CITY OK 73134
Steven E West director 411 WEST PUTNAM AVE., SUITE 125, GREENWICH CT 06830
Frank D. Tsuru director 500 WEST TEXAS AVENUE, SUITE 1200, MIDLAND TX 79701
Rebecca A Klein director 1411 E MISSION AVE, SPOKANE WA 99202
Jennifer Soliman officer: Sr. VP and Chief HR Officer 500 WEST TEXAS, SUITE 1200, MIDLAND TX 79701
Russell Pantermuehl officer: Exec. VP Reservoir Engineering 500 WEST TEXAS, SUITE 1225, MIDLAND TX 79701
Michael P Cross director 515 CENTRAL PARK, OKLAHOMA CITY OK 73101
Thomas F. Hawkins officer: Sr. VP - Land 500 WEST TEXAS, SUITE 1200, MIDLAND TX 79701
Stephanie K. Mains director C/O GATES INDUSTRIAL CORPORATION PLC, 1144 FIFTEENTH STREET, SUITE 1400, DENVER CO 80202
Vincent K Brooks director 900 POLO CLUB DRIVE, AUSTIN TX 78737