Secondary offering reshapes Viper Energy’s shareholder base

Viper Energy (VNOM) is back in focus after Diamondback Energy and affiliated investors completed a secondary sale of about 17.4 million Class A shares, increasing the stock’s public float and potentially changing trading behavior.

The secondary offering follows a 30 day share price return of 8.58% and an 11.57% gain over 90 days, with 1 year total shareholder return at 11.41%, indicating that recent momentum has been building even as the latest sale modestly weighed on near term pricing.

If this shift in ownership is on your radar, it could be a good moment to see what else is moving in energy linked names and check out 85 nuclear energy infrastructure stocks as another way to source ideas.

With shares around $44.65 after a strong 2025 production year, richer dividends and a sizeable shareholder sell down, are you looking at an undervalued mineral royalty play here, or is the market already pricing in future growth?

Most Popular Narrative: 35.3% Overvalued

Idle’s widely followed narrative pegs Viper Energy’s fair value at $32.99 per share, compared with the recent $44.65 close, setting up a clear valuation gap for investors to weigh.

This is one of three major benefits the company brings to the table: As I just briefly explained, the company has a high-margin business model, as it does not incur drilling costs. The Permian is home to almost half of all onshore horizontal rigs in the United States. Essentially, it is the place to be for oil and gas production with elevated reserves and low breakeven prices. In a recent article, I showed the chart below. As we can see, the Permian has mostly undeveloped wells, which bodes well for future production. Image Bloomberg Related to the second advantage, the Permian also benefits from decent infrastructure, a favorable regulatory environment, and lower operational risks compared to emerging basins. Nonetheless, because of elevated production, more infrastructure is needed in the years ahead, which is one of the reasons why I'm also very bullish on the midstream industry.

Curious how a high margin royalty model, deep Permian inventory and a specific profit outlook combine into that lower fair value line? The narrative leans on targeted revenue growth, firm margins and a particular future earnings multiple to justify its stance, without treating today’s share price as the guide. Want to see exactly which assumptions Idle uses to bridge from growth story to $32.99?

Result: Fair Value of $32.99 (OVERVALUED)

However, that $32.99 fair value hinges on specific growth and margin assumptions, and Viper’s recent net income loss of $69.0m could pull actual earnings away from the script.

Another Take: Cash Flows Tell a Different Story

Idle’s narrative points to Viper Energy trading rich to a $32.99 fair value, yet our DCF model lands in a very different place, with a future cash flow value of $128.33 per share versus the current $44.65. That gap suggests the real debate is about how durable those future cash flows could be.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Viper Energy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this mix of bullish and cautious signals feels finely balanced, act now and check the full rundown of 2 key rewards and 2 important warning signs before you settle on your view.

Looking for more investment ideas?

If Viper has you thinking more broadly about where to put fresh capital, do not stop here. Widen your search and let the data work for you.

• Target quality at a discount by scanning 47 high quality undervalued stocks, where strong fundamentals meet prices that may not fully reflect them yet.
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• Sleep a little easier by reviewing 77 resilient stocks with low risk scores, highlighting businesses with lower overall risk scores based on their financial and operational profile.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.