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Viper Energy (VNOM)
NASDAQ:VNOM
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Viper Energy
(NASDAQ:VNOM)
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Rating:76Outperform
Price Target:
$43.00
â–²(17.52% Upside)
Viper Energy's overall stock score is driven by strong financial performance and positive earnings call sentiment, supported by strategic growth and capital return plans. However, challenges in cash management and market concerns over recent acquisitions slightly temper the outlook.
Positive Factors
Revenue Growth
Consistent revenue growth indicates robust demand and effective business operations, supporting long-term financial health and market competitiveness.
Strategic Acquisitions
The acquisition enhances Viper's production profile and growth potential, aligning with its strategy to expand market presence and operational scale.
Return of Capital
Commitment to capital return demonstrates strong cash generation and shareholder value focus, enhancing investor confidence and long-term attractiveness.
Negative Factors
Negative Free Cash Flow
Declining free cash flow indicates potential cash management issues, which could hinder investment capacity and financial flexibility over time.
Debt Management
Rising debt levels may strain financial resources, impacting Viper's ability to invest in growth opportunities and maintain a strong balance sheet.
Concerns Over Non-Permian Assets
Diversification into non-core areas may dilute focus and operational efficiency, posing strategic risks if these assets underperform or require significant management resources.
Viper Energy (VNOM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.96B
Dividend Yield6.45%
Average Volume (3M)1.89M
Price to Earnings (P/E)10.6
Beta (1Y)0.59
Revenue Growth17.92%
EPS Growth18.39%
CountryUS
EmployeesN/A
SectorEnergy
Sector Strength52
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)0.41
Shares Outstanding169,318,800
10 Day Avg. Volume1,714,778
30 Day Avg. Volume1,893,297
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)2.73
Price to Sales (P/S)5.40
P/FCF Ratio-60.15
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue11.61
Enterprise Value/Gross Profit19.11
Enterprise Value/Ebitda12.35
Forecast
1Y Price Target
$51.15Price Target Upside39.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
Viper Energy Business Overview & Revenue Model
Company DescriptionViper 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 MoneyViper 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 Earnings Call Summary
Earnings Call Date:Aug 04, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong production growth and strategic acquisitions, with a clear plan for returning capital to shareholders. However, market reactions to recent acquisitions and the integration of non-Permian assets present some challenges. Overall, the sentiment leans positive due to strategic growth and capital return plans.Q2-2025 Updates
Positive Updates
Strong Oil Production Growth
Despite oil price volatility, Viper Energy delivered strong oil production growth both on an absolute and per-share basis in the second quarter of 2025.
Acquisition of Sitio Royalties
Viper Energy announced a definitive agreement to acquire Sitio Royalties in an all-equity transaction, adding substantial scale and inventory depth, supporting production profile over the next decade with an expected 15% year-over-year growth in oil production.
Return of Capital Commitment
Viper Energy is returning $0.56 per share to stockholders this quarter, representing 75% of their cash available for distribution, with plans to return all excess cash up to 100% once net debt is at or below $1.5 billion.
Increased Third-Party Operator Activities
Viper Energy witnessed increased third-party operator activities on their assets despite a broader industry slowdown, benefiting from consistent development plans from major operators like Exxon, Oxy, EOG, and Conoco.
Negative Updates
Market Underappreciation of Acquisition
Viper Energy's stock underperformed several peers since announcing the Sitio acquisition, indicating a potential market underappreciation of the acquisition's benefits.
Concerns Over Non-Permian Assets
There is some uncertainty regarding the future of non-Permian assets in the Sitio portfolio, as Viper Energy traditionally focuses on being a Permian-only business.
Company Guidance
During the Viper Energy Second Quarter 2025 Earnings Conference Call, CEO Matthew Kaes Van't Hof provided guidance highlighting significant organic growth and strategic acquisitions. Viper Energy anticipates over 15% year-over-year growth in Diamondback-operated net oil production, with a mid-single-digit percentage increase in full-year 2026 average production from expected Q4 2025 levels. Additionally, oil production per share is projected to be approximately 15% higher in 2026 compared to 2025. The guidance also emphasized the strategic acquisition of Sitio Royalties, expected to close post-August 18, 2025, adding substantial scale and inventory depth. This acquisition aligns with Viper's strategy to maintain a strong balance sheet, targeting a pro forma net debt of $1.5 billion, representing approximately 1 turn of leverage at $50 WTI. Viper plans to return $0.56 per share to stockholders this quarter, representing 75% of cash available for distribution, with a potential to return up to 100% of available cash when net debt is at or below the target.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.85
Very Positive
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.78
Positive
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.65
Positive
| 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
Negative
36.59
Price Trends
38.20
Negative
38.34
Negative
40.83
Negative
Market Momentum
-0.30
Positive
39.97
Neutral
11.34
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VNOM, the sentiment is Negative. The current price of 36.59 is below the 20-day moving average (MA) of 38.21, below the 50-day MA of 38.20, and below the 200-day MA of 40.83, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 39.97 is Neutral, neither overbought nor oversold. The STOCH value of 11.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VNOM.
Viper Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $14.21B | 11.47 | 38.42% | 9.56% | 7.11% | -16.14% | |
76 Outperform | $11.96B | 10.58 | 16.43% | 6.45% | 17.92% | 18.39% | |
73 Outperform | $6.79B | 11.99 | 52.91% | 8.81% | 9.02% | 17.28% | |
69 Neutral | $11.12B | 29.44 | 8.48% | 2.91% | 15.28% | -9.99% | |
67 Neutral | $11.15B | 17.53 | 8.34% | 9.17% | -4.31% | -17.80% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
63 Neutral | $12.80B | 24.51 | 8.16% | 8.63% | -4.31% | -16.62% |
* Energy Sector Average
VNOM
Viper Energy
36.59
-11.05
-23.19%
PAA
Plains All American
15.89
-0.15
-0.94%
WES
Western Midstream Partners
37.34
1.96
5.54%
PAGP
Plains GP Holdings
16.88
-0.28
-1.63%
HESM
Hess Midstream Partners
32.16
-1.16
-3.48%
DTM
DT Midstream
109.97
27.03
32.59%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.