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Matador Resources Company (MTDR)
NYSE:MTDR

Matador Resources (MTDR) AI Stock Analysis

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Matador Resources

(NYSE:MTDR)

Rating:82Outperform
Price Target:
$53.00
▲(18.38%Upside)
Matador Resources demonstrates strong financial performance, attractive valuation, and strategic initiatives in its earnings call and corporate events. While technical indicators show mixed momentum, the company's robust financial health and strategic focus on growth and shareholder value position it well in the industry.
Positive Factors
Capital Efficiency
The company is expected to save roughly $100 million in capital expenditures, generating an additional $71 million of free cash flow, reducing the post-dividend free cash flow breakeven.
Operational Performance
Reported adj EBITDA of $644m, ahead of consensus of $638m and Benchmark’s $634m.
Share Repurchase
The Board of Directors authorized a $400 million buyback, marking the first authorization for Matador Resources, which historically avoided buybacks.
Negative Factors
Price Volatility Risks
Risks to the Buy rating include prices falling dramatically for a long period, impacting earnings capacity.
Productivity Risks
Geologic risks that may affect productivity could present challenges for the company.

Matador Resources (MTDR) vs. SPDR S&P 500 ETF (SPY)

Matador Resources Business Overview & Revenue Model

Company DescriptionMatador Resources Company, an independent energy company, engages in the exploration, development, production, and acquisition of oil and natural gas resources in the United States. It operates through two segments, Exploration and Production; and Midstream. The company primarily holds interests in the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. It also operates the Eagle Ford shale play in South Texas; and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. In addition, the company conducts midstream operations in support of its exploration, development, and production operations; provides natural gas processing and oil transportation services; and offers oil, natural gas, and produced water gathering services, as well as produced water disposal services to third parties. As of December 31, 2021, its estimated total proved oil and natural gas reserves were 323.4 million barrels of oil equivalent, including 181.3 million stock tank barrels of oil and 852.5 billion cubic feet of natural gas. The company was formerly known as Matador Holdco, Inc. and changed its name to Matador Resources Company in August 2011. Matador Resources Company was founded in 2003 and is headquartered in Dallas, Texas.
How the Company Makes MoneyMatador Resources generates revenue primarily through the sale of oil, natural gas, and natural gas liquids (NGLs) extracted from its exploration and production activities. The company's revenue model is largely driven by the production volumes and prevailing market prices of these commodities. Matador undertakes strategic acquisitions and development of oil and gas properties to increase its reserves and production capacity, thereby enhancing its revenue potential. Additionally, Matador's operations benefit from its midstream subsidiary, San Mateo Midstream, which provides gathering, processing, and transportation services, contributing to cost efficiencies and additional revenue streams.

Matador Resources Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: 10.43%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strategic approach to navigating market uncertainties with strong financial management and operational capacity expansion. Despite short-term production challenges and market volatility, the company's actions, including debt reduction, increased processing capacity, and a share buyback program, suggest confidence in long-term growth and shareholder value.
Q1-2025 Updates
Positive Updates
Debt Reduction
Matador Resources repaid $190 million of debt, indicating strong cash flow management and financial health.
Gas Processing Capacity Expansion
The new Marlin plant coming online increased the processing capacity to 720 million from the original 60 million, enhancing flow assurance and operational capability.
Share Buyback Program
The board authorized a share repurchase program, demonstrating alignment with shareholder interests and confidence in company valuation.
Production Growth Outlook
Despite a slight slowdown, Matador expects a 17% growth in oil production by year-end, driven by operational adjustments and new wells coming online.
Strong Insider Investment
Management and employees actively bought shares, indicating strong internal confidence in the company's future performance.
Negative Updates
Reduced Production in Q1
Production slowdown due to maintenance and force majeure events, resulting in a 1-2% decline in production.
Operational Adjustments
Matador reduced activity, including cutting rigs from the Meredith asset and Antelope Ridge, and shifted focus to West Texas amid market uncertainties.
Hedging for 2026
Concerns over capacity issues prompted Matador to lock in wider gas dips for 2026, indicating potential vulnerabilities in future market conditions.
Company Guidance
During the Matador Resources Company's First Quarter 2025 earnings call, CEO Joseph Foran highlighted several key metrics and strategic decisions. The company successfully reduced its debt by $190 million and announced the completion of its Marlin gas processing plant, which, along with the Black River plant, increases processing capacity to 720 million cubic feet per day. Despite a slight 1-2% production dip due to maintenance and force majeure events, the company projects a 17% growth in oil production by year-end. Matador also emphasized shareholder alignment, with management and over 100 employees purchasing company shares, supported by a board-authorized share repurchase program. Additionally, the company is exploring IPO options for its midstream segment and has hedged against potential future gas pricing vulnerabilities.

Matador Resources Financial Statement Overview

Summary
Matador Resources shows strong financial health with consistent revenue growth and high profitability margins. The company effectively manages costs and maintains a stable balance sheet with moderate leverage. Its strong cash flow management enhances liquidity and financial flexibility.
Income Statement
85
Very Positive
Matador Resources has demonstrated strong performance on its income statement with consistent revenue growth, particularly a 6.34% increase in TTM. The gross profit margin of 56.57% and net profit margin of 25.18% indicate solid profitability. The EBIT margin of 40.89% and EBITDA margin of 65.91% further underscore efficient operations. The company effectively manages costs, translating high revenues into robust profits.
Balance Sheet
78
Positive
The balance sheet of Matador Resources reveals a stable financial position, with a debt-to-equity ratio of 0.40 indicating moderate leverage. The return on equity of 17.62% demonstrates effective use of shareholders' equity to generate profits. However, the equity ratio of 47.70% suggests a balanced capital structure. The company maintains solid asset management and financial stability.
Cash Flow
82
Very Positive
Matador Resources shows strong cash flow management with a substantial free cash flow growth rate of 286.89% in TTM, evidencing improved liquidity. The operating cash flow to net income ratio of 2.69 and free cash flow to net income ratio of 1.16 highlight the company's ability to convert earnings into cash, enhancing financial flexibility.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.69B3.48B2.82B3.06B1.66B862.13M
Gross Profit
1.60B1.54B1.33B1.88B891.54M227.77M
EBIT
1.51B1.43B1.21B1.76B793.08M165.11M
EBITDA
2.56B2.42B1.94B2.23B1.14B-353.67M
Net Income Common Stockholders
931.68M885.32M846.07M1.21B584.97M-553.56M
Balance SheetCash, Cash Equivalents and Short-Term Investments
74.33M23.03M52.66M505.18M48.13M57.92M
Total Assets
8.23B10.85B7.73B5.55B4.26B3.69B
Total Debt
1.97B3.42B2.27B1.16B1.53B1.81B
Net Debt
1.90B3.39B2.22B655.07M1.48B1.76B
Total Liabilities
3.59B5.46B3.60B2.24B2.13B2.17B
Stockholders Equity
4.42B5.09B3.91B3.11B1.91B1.29B
Cash FlowFree Cash Flow
549.67M280.04M318.02M894.75M319.88M-302.87M
Operating Cash Flow
2.51B2.25B1.87B1.98B1.05B477.58M
Investing Cash Flow
-3.63B-3.67B-3.21B-1.04B-729.26M-775.67M
Financing Cash Flow
1.13B1.41B902.33M-480.85M-328.55M324.34M

Matador Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price44.77
Price Trends
50DMA
42.97
Positive
100DMA
48.71
Negative
200DMA
51.25
Negative
Market Momentum
MACD
0.48
Negative
RSI
54.91
Neutral
STOCH
69.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTDR, the sentiment is Positive. The current price of 44.77 is above the 20-day moving average (MA) of 44.22, above the 50-day MA of 42.97, and below the 200-day MA of 51.25, indicating a neutral trend. The MACD of 0.48 indicates Negative momentum. The RSI at 54.91 is Neutral, neither overbought nor oversold. The STOCH value of 69.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTDR.

Matador Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$5.73B6.1519.20%2.39%21.73%1.48%
76
Outperform
$5.53B6.4112.64%5.51%31.71%-32.13%
MUMUR
75
Outperform
$3.14B8.457.54%5.77%-14.90%-27.53%
MGMGY
74
Outperform
$4.32B11.1220.85%2.51%8.78%0.56%
57
Neutral
$7.16B3.10-4.49%5.66%0.82%-49.15%
53
Neutral
$2.22B-24.93%5.70%5.82%-481.39%
CRCRK
52
Neutral
$6.98B-14.17%0.66%-1.73%-608.98%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MTDR
Matador Resources
44.77
-12.44
-21.74%
CRK
Comstock Resources
24.23
12.51
106.74%
MUR
Murphy Oil
21.54
-16.78
-43.79%
PTEN
Patterson-UTI
5.57
-4.35
-43.85%
MGY
Magnolia Oil & Gas
22.12
-1.67
-7.02%
CHRD
Chord Energy
92.00
-67.03
-42.15%

Matador Resources Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Matador Resources Reports Q1 2025 Production Surge
Positive
Apr 23, 2025

On April 23, 2025, Matador Resources reported its first quarter 2025 results, highlighting a 33% increase in total oil and gas production compared to the previous year. The company also announced a $400 million share repurchase program and adjustments to its drilling activities, reducing its capital expenditures by $100 million for the year. These strategic moves are aimed at enhancing shareholder value and providing operational flexibility amid market volatility.

Dividends
Matador Resources Announces Quarterly Cash Dividend
Positive
Apr 16, 2025

On April 16, 2025, Matador Resources Company announced a quarterly cash dividend of $0.3125 per share of common stock, payable on June 6, 2025, to shareholders of record as of May 9, 2025. This dividend declaration follows the company’s dividend policy adopted in February 2025, reflecting Matador’s commitment to returning value to shareholders. The decision underscores the company’s stable financial position and operational success, which could positively impact its market standing and investor confidence.

Shareholder MeetingsBusiness Operations and Strategy
Matador Resources Announces Shareholder Update and Town Hall
Neutral
Apr 9, 2025

On April 8, 2025, Matador Resources Company announced a shareholder communication update on its website, along with a scheduled ‘Town Hall’ conference call for April 28, 2025. This announcement provides stakeholders with an opportunity to engage with the company and gain insights into its current operations and future plans.

M&A TransactionsBusiness Operations and Strategy
Matador Resources Sells Eagle Ford Assets for $30M
Positive
Apr 8, 2025

Matador Resources Company announced the sale of its remaining Eagle Ford shale assets in South Texas, generating over $30 million in proceeds, which were used to reduce its credit facility borrowings. This strategic move allows Matador to concentrate on its high-quality acreage in the Delaware Basin, where it holds approximately 200,000 net acres. The company also reported a strong financial position at the end of the first quarter of 2025, with $1.8 billion in liquidity and a leverage ratio of one times or less. Additionally, Matador has taken precautionary measures, including entering into new oil hedges and securing inventory for its 2025 drilling program, to mitigate the impact of market volatility and potential tariff-related cost increases.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.