Magnolia Oil & Gas (MGY) AI Stock Analysis

• Market Cap: $4.40B
• Dividend Yield: 2.62%
• Average Volume (3M): 2.15M
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.83
• Revenue Growth: 8.78%
• EPS Growth: 0.56%
• Country: US
• Employees: 252
• Sector: Energy
• Sector Strength: 55
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 0.53
• Shares Outstanding: 186,948,930
• 10 Day Avg. Volume: 2,942,430
• 30 Day Avg. Volume: 2,152,622
• PEG Ratio: 0.10
• Price to Book (P/B): 2.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.29
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 0.78
• Enterprise Value/Gross Profit: 5.93
• Enterprise Value/Ebitda: 1.09
• 1Y Price Target: $25.33
• Price Target Upside: 9.32% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 73 Outperform
• Price Target: $26.00 ▲(12.21%Upside)

Magnolia Oil & Gas showcases solid financial performance and effective management execution, as evidenced by strong earnings call highlights. The company's zero debt and prudent financial management provide a stable foundation, although technical indicators suggest cautious optimism. Valuation is attractive, adding to the stock's appeal.

Positive Factors

Capital Returns

MGY consistently executes on the capital returns front with $81.2 million returned to shareholders during 1Q25, aligning with estimates.

Dividend Growth

The company announced a 15% increase to its quarterly base dividend, exceeding expectations and its long-term target for annual dividend growth.

Financial Performance

MGY reported higher total production and lower capex in 1Q25, leading to an improved 2025 outlook with a 5.3% reduction to total capex and 1.9% boost to total production guidance.

Negative Factors

First Quarter Challenges

The first quarter of 2025 volume guidance is slightly below some expectations, signaling potential challenges in meeting higher forecasts.

Premium Valuation

The stock is trading at a considerable premium to peers on EV/EBITDX.

Weak Oil Macro

Limited upside due to a weak oil macro keeps the rating at Neutral.

Magnolia Oil & Gas Business Overview & Revenue Model

Company Description

Magnolia Oil & Gas Corporation engages in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquids reserves in the United States. Its properties are located primarily in Karnes County and the Giddings Field in South Texas principally comprising the Eagle Ford Shale and the Austin Chalk formation. As of December 31, 2021, the company's assets consisted of a total leasehold position of 4,71,263 net acres, including 23,785 net acres in Karnes and 4,47,478 net acres in the Giddings area, as well as holds 1,292 net wells with a total production capacity of 66.0 thousand barrels of oil equivalent per day. The company was incorporated in 2017 and is headquartered in Houston, Texas.

How the Company Makes Money

Magnolia Oil & Gas generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids (NGLs) extracted from its developed properties in South Texas. The company makes money by exploring for and producing hydrocarbons, which are then sold to refineries, processing plants, and other customers in the energy market. Key revenue streams include the sale of produced oil, gas, and NGLs, with pricing largely influenced by market conditions and commodity prices. Magnolia funds its operations through cash flows generated from sales and aims to maintain a strong balance sheet by controlling costs and optimizing production efficiencies. Additionally, the company may engage in strategic partnerships and joint ventures to enhance its exploration and production capabilities and expand its asset base.

Magnolia Oil & Gas Financial Statement Overview

Summary

Magnolia Oil & Gas has strong operational margins and prudent financial management, highlighted by zero debt and a robust equity position. While revenue and cash flow trends are positive, the challenge remains in maintaining net income growth.

Income Statement

The income statement shows a mixed trend for Magnolia Oil & Gas. The company experienced a moderate increase in revenue to $1.32 billion in TTM (Trailing-Twelve-Months) compared to $1.23 billion in the previous year, indicating a revenue growth rate of approximately 7.24%. The gross profit margin improved to 63.87% in TTM, reflecting efficient cost management. However, net profit margin decreased slightly to 27.81% in TTM from 31.66% last year, primarily due to reduced net income. EBITDA margin remained strong at 68.35% in TTM, showcasing robust operational performance. The company needs to focus on maintaining its net income to improve profitability.

Balance Sheet

Magnolia Oil & Gas exhibits a strong balance sheet with zero debt in TTM, indicating financial prudence and a significant reduction from $409.55 million in the previous year. The company has a high equity ratio of 26.75% in TTM, reflecting a solid equity position. Return on equity (ROE) stands at 48.50%, demonstrating effective utilization of shareholder funds. The company's strong cash position and equity base provide a stable financial foundation, though the company should aim to improve its asset base to enhance long-term growth.

Cash Flow

The company's cash flow performance is steady with operating cash flow increasing to $920.85 million in TTM from $855.79 million last year. Free cash flow decreased to $291.40 million in TTM from $430.90 million, mainly due to higher capital expenditure. The operating cash flow to net income ratio is robust at 2.52, indicating strong cash generation ability relative to net income. Despite the decline in free cash flow, the company maintains a healthy cash flow position with adequate liquidity to fund operations and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.35B	1.32B	1.23B	1.69B	1.08B	534.51M
Gross Profit	693.30M	680.69M	692.89M	1.26B	742.76M	128.81M
EBITDA	951.64M	922.00M	878.67M	1.33B	801.53M	-1.62B
Net Income	383.87M	366.03M	388.30M	893.84M	559.72M	-1.87B
Balance Sheet
Total Assets	2.87B	2.82B	2.76B	2.57B	1.75B	1.45B
Cash, Cash Equivalents and Short-Term Investments	247.56M	260.05M	401.12M	675.44M	366.98M	192.56M
Total Debt	0.00	392.51M	409.55M	390.38M	388.09M	391.12M
Total Liabilities	879.29M	853.51M	873.55M	832.39M	701.49M	614.00M
Stockholders Equity	1.99B	1.97B	1.69B	1.58B	816.76M	548.16M
Cash Flow
Free Cash Flow	290.73M	431.74M	430.90M	831.55M	552.05M	87.91M
Operating Cash Flow	934.41M	920.85M	855.79M	1.30B	788.48M	310.12M
Investing Cash Flow	-673.89M	-655.12M	-814.90M	-518.89M	-243.44M	-269.99M
Financing Cash Flow	-412.28M	-406.80M	-315.21M	-469.34M	-370.61M	-30.20M

Magnolia Oil & Gas Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGY, the sentiment is Positive. The current price of 23.17 is above the 20-day moving average (MA) of 23.12, above the 50-day MA of 22.13, and below the 200-day MA of 23.93, indicating a neutral trend. The MACD of 0.34 indicates Positive momentum. The RSI at 52.13 is Neutral, neither overbought nor oversold. The STOCH value of 13.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MGY.

Magnolia Oil & Gas Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOG	76 Outperform	$2.90B	4.47	29.41%	6.27%	24.27%	5.01%
VIST	75 Outperform	$4.62B	9.76	32.69%	―	54.19%	37.69%
MUR	75 Outperform	$3.21B	8.64	7.54%	5.77%	-14.90%	-27.53%
MGY	73 Outperform	$4.40B	11.35	20.85%	2.62%	8.78%	0.56%
CNX	69 Neutral	$4.82B	9.01	-7.30%	―	22.23%	-130.65%
GPOR	63 Neutral	$3.59B	16.69	-16.01%	―	10.44%	-139.05%
Sector *	44 Neutral	AU$1.36B	-6.68	-23.02%	6.71%	5.33%	-26.92%

Magnolia Oil & Gas Corporate Events

Magnolia Oil & Gas Holds Annual Stockholders Meeting

On May 7, 2025, Magnolia Oil & Gas Corporation conducted its Annual Meeting of Stockholders where several key decisions were made. All eight nominees for the board of directors were elected for a one-year term, and the stockholders approved an advisory resolution on executive compensation for 2024. Additionally, it was decided that future say-on-pay votes will be held annually, and KPMG LLP was ratified as the independent registered public accounting firm for the 2025 fiscal year.

Magnolia Oil & Gas Reports Strong Q1 2025 Results

On April 30, 2025, Magnolia Oil & Gas Corporation announced its financial and operational results for the first quarter of 2025, highlighting a 14% increase in production volumes compared to the previous year. The company reported a net income of $106.6 million and adjusted EBITDAX of $248.4 million, with a notable 25% production growth in the Giddings area. Due to stronger than expected well performance, Magnolia raised its full-year production growth guidance and reduced its capital spending program. The company also returned $81.7 million to shareholders through share repurchases and dividends, maintaining a strong cash position and operational flexibility.