Diamondback Energy, Inc. — Earnings Quality Grade F
FANG · Energy
Major red flags
Screening Summary
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 34 days, change -19 days YoY
AR growth -12.6% vs revenue growth 35.4%
Revenue 35.4%, CFFO 36.6%. Cash follows revenue
Expense Quality
Inventory -25.9% vs COGS 61.0%. Normal
CapEx growth -19.7% vs revenue 35.4%. Normal
SG&A/Gross Profit = 5.5%, excellent (<30%)
Gross margin swung -10.3pp (45.3% → 35.0%)
Cash Flow Quality
CFFO/NI = 5.26. Profits backed by cash
FCF < 50% of Net Income for 3 years
Accruals ratio = -10.0%. Low accruals
Cash $0.1B covers only 1% of debt $14.9B
Balance Sheet Health
No goodwill. Clean balance sheet
Debt/EBITDA = 2.1x. Healthy
Other assets -26.3% vs revenue 35.4%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions negative for 2/3 years
No goodwill
Manipulation Score
M-Score = -2.98 (< -2.22). Unlikely manipulator
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-08