Is VNOM a high-quality business?

AlphaMadera's AlphaQuality grade scores Viper Energy, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how VNOM compares to a Buffett-style quality bar.

What is Viper Energy, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to VNOM based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes VNOM a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

VNOM - Viper Energy, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $55.43 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Oil & Gas E&P

AlphaQuality — archetype-weighted quantitative grade

C- 45.7 / 100 composite

Composite Grade

Composite of six pillars weighted for oil & gas e&p businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

D- 29.6

5yr Avg ROIC 6.4% 42/100
Operating Margin Trend -7.01 pp/yr 0/100

Capital Efficiency

Weight: 10%

F 16.7

5yr Avg ROE 3.2% 26/100
5yr Share-Count CAGR 20.2% 0/100

Growth Quality

Weight: 5%

A+ 96.0

5yr Revenue CAGR 27.8% 100/100
5yr EPS CAGR 65.0% 100/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 25%

D 34.2

5yr FCF Margin -13.0% 0/100
5yr FCF/NI Conversion 0.77x 76/100

Balance Sheet

Weight: 25%

B+ 78.4

Net Debt / EBITDA 1.83x 73/100
Interest Coverage (EBIT/Int) 6.03x 69/100
Altman Z-Score 6.22 100/100

Stability

Weight: 20%

D 33.2

EPS Volatility (σ/μ) 0.69 14/100
Piotroski F-Score 2 22/100
Negative-Revenue Years (5) 1/5 80/100

2 of 2 gurus held; 1 added.

Holders: 2
Avg Δ position: +41.0%
New buys: 0
Full exits: 0

Wood increased +82%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (10%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (5%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (25%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.