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Matador Resources Co. (MTDR - Free Report) is an independent oil and gas company. Analysts are cutting this Zacks Rank #5 (Strong Sell)’s earnings estimates as the price of oil falls.
Matador is an energy company that explores and produces oil and natural gas in the United States. It is focused on shale and other unconventional plays. Current operations include Wolfcamp and Bone Springs plays in the Delaware Basin in Southeast New Mexico and West Texas.
It also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana.
Additionally, Matador has midstream operations which provides natural gas processing, oil transportation services, natural gas and produced water gathering services and produced water disposal services to third parties.
Matador is an Earnings All-Star
Matador Resources has done something over the last 5 years that few companies have done: it has beat the Zacks Consensus on earnings every quarter.
It has a perfect earnings surprise track record.
Image Source: Zacks Investment Research
While that would be impressive for any company, given the pandemic which hit in 2020 and shut the global economy, it is even more so for an oil producer as oil went negative in 2020 and the industry was in a dark place.
Analysts are Cutting Matador’s Earnings Estimates for 2024 and 2025
The price of WTI crude has fallen in 2024 and, along with it, so has Matador’s share price. Here’s a 3-month chart with the two overlapped and they are moving in tandem.
Image Source: Zacks Investment Research
Matador Resources is unhedged, which means that its earnings will be determined by the movements of oil, up or down.
Currently, with oil having weakened, even falling under $70 recently, the analysts have gotten bearish.
3 estimates have been cut for 2024 in the last 30 days and 4 estimates have been cut for 2025.
As a result, the 2024 Zacks Consensus Estimate has fallen to $7.40 from $7.83 over the last month. But that is still earnings growth of 9.3% compared to 2023 when Matador made just $6.77.
The 2025 Zacks Consensus has also fallen sharply, to $8.03 from $9.41 just 30 days ago.
Matador is a Value Stock
Even with the earnings estimate cuts, Matador remains a cheap stock on a price-to-earnings basis because the shares have fallen as well.
Matador shares are down 4.7% year-to-date. It has a forward P/E of just 7.2.
It also has an attractive price-to-book (P/B) ratio of just 1.4. A P/B ratio under 3.0 usually indicates value.
Matador is also shareholder friendly and pays a dividend, currently yielding 1.5%.
Matador is set to report earnings again on Oct 22, 2024. Will it beat again and keep its earnings surprise steak alive?
Investors might want to wait on the sidelines until they find out.
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Bear of the Day: Matador Resources (MTDR)
Matador Resources Co. (MTDR - Free Report) is an independent oil and gas company. Analysts are cutting this Zacks Rank #5 (Strong Sell)’s earnings estimates as the price of oil falls.
Matador is an energy company that explores and produces oil and natural gas in the United States. It is focused on shale and other unconventional plays. Current operations include Wolfcamp and Bone Springs plays in the Delaware Basin in Southeast New Mexico and West Texas.
It also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana.
Additionally, Matador has midstream operations which provides natural gas processing, oil transportation services, natural gas and produced water gathering services and produced water disposal services to third parties.
Matador is an Earnings All-Star
Matador Resources has done something over the last 5 years that few companies have done: it has beat the Zacks Consensus on earnings every quarter.
It has a perfect earnings surprise track record.
Image Source: Zacks Investment Research
While that would be impressive for any company, given the pandemic which hit in 2020 and shut the global economy, it is even more so for an oil producer as oil went negative in 2020 and the industry was in a dark place.
Analysts are Cutting Matador’s Earnings Estimates for 2024 and 2025
The price of WTI crude has fallen in 2024 and, along with it, so has Matador’s share price. Here’s a 3-month chart with the two overlapped and they are moving in tandem.
Image Source: Zacks Investment Research
Matador Resources is unhedged, which means that its earnings will be determined by the movements of oil, up or down.
Currently, with oil having weakened, even falling under $70 recently, the analysts have gotten bearish.
3 estimates have been cut for 2024 in the last 30 days and 4 estimates have been cut for 2025.
As a result, the 2024 Zacks Consensus Estimate has fallen to $7.40 from $7.83 over the last month. But that is still earnings growth of 9.3% compared to 2023 when Matador made just $6.77.
The 2025 Zacks Consensus has also fallen sharply, to $8.03 from $9.41 just 30 days ago.
Matador is a Value Stock
Even with the earnings estimate cuts, Matador remains a cheap stock on a price-to-earnings basis because the shares have fallen as well.
Matador shares are down 4.7% year-to-date. It has a forward P/E of just 7.2.
It also has an attractive price-to-book (P/B) ratio of just 1.4. A P/B ratio under 3.0 usually indicates value.
Matador is also shareholder friendly and pays a dividend, currently yielding 1.5%.
Matador is set to report earnings again on Oct 22, 2024. Will it beat again and keep its earnings surprise steak alive?
Investors might want to wait on the sidelines until they find out.