Value
6.3/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 4.0 |
| EV/EBITDA | 6.0 |
| Fwd P/E | 7.5 |
| PEG | 4.9 |
| Analyst target | 9.0 |
- ▸Forward P/E: 16.4x
- ▸PEG: 1.56
VNOM · Why this verdict
Why Viper Energy (VNOM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Year-over-year revenue growth of 109% — the top score in its dimension — combined with a Rule of 40 score of 43 reflects rapid expansion in mineral royalty income driven by Permian Basin activity. Growth breakdown | Revenue growth stays above 30% year-over-year in at least 3 of the next 4 reported quarters. | →Stable |
| CounterTriple-digit revenue growth in energy royalties is often cyclical and driven by oil price levels rather than volume gains; a commodity downturn could sharply reduce headline growth without any operational change. | ||
All mineral royalty income is derived from the Permian Basin and specifically the Wolfberry resource play in the Midland Basin, creating geographic and geological concentration risk that could be amplified by any regional regulatory, infrastructure, or geological disruption. Bear case | Permian Basin revenue sources diversify so that no single sub-basin contributes more than 60% of royalty income within 24 months. | →Stable |
| CounterThe Permian Basin is the highest-quality, lowest-cost oil production region in the United States; concentration in the best basin is a deliberate strategic choice that maximizes returns per royalty acre. | ||
Three of the four most recent quarters produced earnings at or above analyst estimates, with positive surprises in each reported beat quarter, demonstrating reliable execution against consensus within the royalty income model. Earnings | Earnings surprise stays positive in at least 3 of the next 4 reported quarters. | →Stable |
| CounterBeat margins have been narrow at 2-6% per quarter; the February 2026 quarter technically showed inline performance at minus 1%, making the streak less compelling than a dominant beat pattern. | ||
With RSI pulling back to 39 and falling on-balance volume confirming distribution pressure, the stock is experiencing near-term price weakness that has reduced the technical score to 3.2, below the minimum momentum threshold. Momentum breakdown | RSI recovers above 50 and on-balance volume turns upward within the next 3 months, resolving the current pullback. | →Stable |
| CounterRSI at 39 in a quality royalty company with 109% revenue growth and analyst upside of 33% may represent a genuine buying opportunity rather than the start of a sustained downtrend. | ||
Year-over-year revenue growth of 109% — the top score in its dimension — combined with a Rule of 40 score of 43 reflects rapid expansion in mineral royalty income driven by Permian Basin activity.
→StableGrowth breakdown
- Expectation
- Revenue growth stays above 30% year-over-year in at least 3 of the next 4 reported quarters.
CounterTriple-digit revenue growth in energy royalties is often cyclical and driven by oil price levels rather than volume gains; a commodity downturn could sharply reduce headline growth without any operational change.
All mineral royalty income is derived from the Permian Basin and specifically the Wolfberry resource play in the Midland Basin, creating geographic and geological concentration risk that could be amplified by any regional regulatory, infrastructure, or geological disruption.
→StableBear case
- Expectation
- Permian Basin revenue sources diversify so that no single sub-basin contributes more than 60% of royalty income within 24 months.
CounterThe Permian Basin is the highest-quality, lowest-cost oil production region in the United States; concentration in the best basin is a deliberate strategic choice that maximizes returns per royalty acre.
Three of the four most recent quarters produced earnings at or above analyst estimates, with positive surprises in each reported beat quarter, demonstrating reliable execution against consensus within the royalty income model.
→StableEarnings
- Expectation
- Earnings surprise stays positive in at least 3 of the next 4 reported quarters.
CounterBeat margins have been narrow at 2-6% per quarter; the February 2026 quarter technically showed inline performance at minus 1%, making the streak less compelling than a dominant beat pattern.
With RSI pulling back to 39 and falling on-balance volume confirming distribution pressure, the stock is experiencing near-term price weakness that has reduced the technical score to 3.2, below the minimum momentum threshold.
→StableMomentum breakdown
- Expectation
- RSI recovers above 50 and on-balance volume turns upward within the next 3 months, resolving the current pullback.
CounterRSI at 39 in a quality royalty company with 109% revenue growth and analyst upside of 33% may represent a genuine buying opportunity rather than the start of a sustained downtrend.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Viper Energy delivered 109% year-over-year revenue growth and has beaten earnings in 3 of the last 4 quarters, with analyst consensus implying 33% upside from current levels, but the stock faces negative price momentum, heavy Permian Basin geographic concentration, and free cash flow burning at 66% of revenue.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.4 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 6.8 |
| FCF quality | 0.0 |
| Moat | 7.2 |
| Rule of 40 | 7.3 |
| Piotroski F | 8.9 |
- ▸Cash-burning: FCF -66% of revenue
- ▸Rule of 40: 43 (pass)
- ▸Strong Piotroski F-Score: 8/9
Growth
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 0.0 |
- ▸Strong growth: 109% YoY
Momentum
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 3.3 |
- ▸Capitulation risk (RSI 24, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+2.9%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.0 |
| Analyst rating | 8.9 |
| Price target | 9.2 |
- ▸Analyst upside: 41%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.9 |
| quality rank | 0.5 |
| growth rank | 9.1 |
- ▸Industry growth leader
Technical
8.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.4 |
| 52w position | 6.2 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 5.6 |
| volatility | 6.0 |
| put call | 0.0 |
| implied vol | 6.9 |
| beta | 10.0 |
| debt equity | 9.4 |
- ▸Elevated put/call: 6.16
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.8 |
| dividend safety | 3.5 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/0M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:5.2>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:1.9<4.5
Warning (0)
none
Reward-to-Risk
5.23
Upside
+27.1%
Downside
5.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:1.9<4.5) reinforce the read. Current asymmetry R:R is 5.23 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.5, Sentiment at 7.4, and Risk (lower is worse) at 6.5; the weakest are Momentum at 1.9, Peer rank at 2.6, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 5.23 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Revenue Growth Rate
Trip ifRevenue growth rate falls below 15% year-over-year in any of the next 4 reported quarters.
- P2Solid Earnings Beat Track Record
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P3Permian Basin Geographic Concentration
Trip ifRoyalty income from any single sub-basin declines by more than 20% quarter-over-quarter, signaling a localized disruption.
- P4Negative Momentum Pullback Opportunity
Trip ifRSI falls below 30 and remains below 30 for more than 15 consecutive trading days, indicating oversold deterioration.