Viper Energy (VNOM) AI Stock Analysis

• Market Cap: $12.20B
• Dividend Yield: 5.96%
• Average Volume (3M): 2.31M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.58
• Revenue Growth: 17.92%
• EPS Growth: 18.39%
• Country: US
• Employees: N/A
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Midstream
• EPS (TTM): 0.41
• Shares Outstanding: 169,318,800
• 10 Day Avg. Volume: 1,839,381
• 30 Day Avg. Volume: 2,311,099
• PEG Ratio: 0.31
• Price to Book (P/B): 2.73
• Price to Sales (P/S): 5.40
• P/FCF Ratio: -60.15
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 11.61
• Enterprise Value/Gross Profit: 19.11
• Enterprise Value/Ebitda: 12.35
• 1Y Price Target: $51.33
• Price Target Upside: 29.62% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 76 Outperform
• Price Target: $43.00 ▲(8.59% Upside)

Viper Energy's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting strategic growth and capital return plans. The valuation is attractive with a low P/E ratio and high dividend yield. Technical analysis presents a neutral outlook, with no strong momentum indicators. The main risk is the negative free cash flow trend, which needs addressing to support future growth.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust demand and effective management of royalty interests, enhancing long-term financial stability.

Strategic Acquisitions

This acquisition supports production growth and strengthens Viper's market position, aligning with long-term strategic goals and enhancing resource base.

Strong Profit Margins

Sustained high profit margins reflect efficient operations and strong pricing power, supporting long-term profitability and shareholder value.

Negative Factors

Negative Free Cash Flow

Declining free cash flow may hinder investment capabilities and financial flexibility, posing a risk to sustainable growth and debt management.

Debt Management Concerns

Rising debt levels can strain financial resources, potentially impacting future investment and operational flexibility if not managed effectively.

Integration Challenges

Uncertainty regarding non-Permian assets may complicate integration efforts, affecting strategic focus and operational efficiency in the long term.

Viper Energy Business Overview & Revenue Model

Company Description

Viper Energy Partners LP owns, acquires, and exploits oil and natural gas properties in North America. As of December 31, 2021, it had mineral interests in 27,027 net royalty acres in the Permian Basin and Eagle Ford Shale; and estimated proved oil and natural gas reserves of 127,888 thousand barrels of crude oil equivalent. Viper Energy Partners GP LLC operates as the general partner of the company. The company was founded in 2013 and is based in Midland, Texas. Viper Energy Partners LP is a subsidiary of Diamondback Energy, Inc.

How the Company Makes Money

Viper Energy generates revenue primarily through the collection of royalties on oil and gas production from its mineral and royalty interests. These royalties are paid by operators who extract resources from the land where Viper holds rights, allowing the company to earn income without the direct costs associated with exploration and production. Key revenue streams include a percentage of the sale price of crude oil, natural gas, and natural gas liquids produced from its properties. Additionally, Viper may benefit from long-term contracts and strategic partnerships with major operators in the industry, which can enhance its revenue stability and growth potential as these operators increase production in high-demand areas.

Viper Energy Financial Statement Overview

Summary

Viper Energy demonstrates strong revenue growth and profitability, supported by efficient operations and a stable balance sheet. However, the negative free cash flow and its declining trend highlight potential challenges in cash management. The company should focus on improving free cash flow generation to sustain its growth trajectory and manage its increasing debt levels effectively.

Income Statement

Viper Energy shows strong revenue growth with a 7.96% increase in TTM, indicating robust demand. The company maintains high profitability with a gross profit margin of 56.70% and a net profit margin of 113.26%, although the latter seems unusually high, possibly due to extraordinary items. EBIT and EBITDA margins are also strong at 109.48% and 165.80% respectively, suggesting efficient operations. However, the decline in gross profit margin from previous periods indicates potential cost pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.32, indicating moderate leverage. Return on equity is healthy at 16.16%, showcasing effective use of equity to generate profits. The equity ratio stands at 34.95%, suggesting a balanced capital structure. However, the increase in total debt over time could pose future risks if not managed carefully.

Cash Flow

Operating cash flow is strong, with a high operating cash flow to net income ratio of 10.19, indicating good cash generation from operations. However, the negative free cash flow and its decline by 8.13% in TTM raise concerns about cash management and investment efficiency. The negative free cash flow to net income ratio suggests that the company is not converting its profits into free cash flow effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	969.93M	853.58M	826.79M	865.77M	504.30M	249.57M
Gross Profit	589.28M	578.28M	630.27M	688.32M	368.75M	129.22M
EBITDA	912.10M	794.25M	742.32M	783.41M	395.23M	82.55M
Net Income	370.98M	359.25M	200.09M	151.67M	57.94M	-192.30M
Balance Sheet
Total Assets	9.79B	5.07B	3.97B	2.92B	3.03B	2.46B
Cash, Cash Equivalents and Short-Term Investments	28.00M	26.85M	25.87M	18.18M	39.45M	19.12M
Total Debt	1.10B	1.08B	1.08B	576.89M	776.73M	555.64M
Total Liabilities	1.18B	1.16B	1.12B	598.85M	801.19M	600.54M
Stockholders Equity	3.42B	1.69B	1.01B	690.01M	814.09M	634.45M
Cash Flow
Free Cash Flow	-1.19B	-76.63M	-270.17M	635.66M	25.94M	130.88M
Operating Cash Flow	733.88M	619.61M	638.19M	699.80M	307.11M	196.56M
Investing Cash Flow	-1.93B	-608.57M	-908.37M	47.57M	-281.18M	-16.28M
Financing Cash Flow	1.19B	-10.05M	277.86M	-768.64M	-5.61M	-164.75M

Viper Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNOM, the sentiment is Positive. The current price of 39.6 is above the 20-day moving average (MA) of 38.52, above the 50-day MA of 37.96, and below the 200-day MA of 41.45, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 58.04 is Neutral, neither overbought nor oversold. The STOCH value of 75.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VNOM.

Viper Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WES	80 Outperform	14.95B	12.06	39.91%	9.07%	7.11%	-16.14%
VNOM	76 Outperform	$12.20B	10.79	16.43%	5.96%	17.92%	18.39%
HESM	72 Outperform	7.40B	13.08	42.04%	8.13%	9.02%	17.28%
DTM	69 Neutral	11.23B	29.71	8.05%	2.87%	15.28%	-9.99%
PAA	68 Neutral	12.50B	19.66	9.44%	8.24%	-4.31%	-17.80%
PAGP	62 Neutral	14.38B	27.54	0.72%	7.75%	-4.31%	-16.62%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%