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Matador Resources Company (MTDR) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Matador Resources (MTDR - Free Report) ? Shares have been on the move with the stock up 15.2% over the past month. The stock hit a new 52-week high of $59.32 in the previous session. Matador Resources has gained 57.5% since the start of the year compared to the 37.9% move for the Zacks Oils-Energy sector and the 58.3% return for the Zacks Oil and Gas - Exploration and Production - United States industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 26, 2022, Matador reported EPS of $2.32 versus consensus estimate of $2.05 while it missed the consensus revenue estimate by 7.11%.
For the current fiscal year, Matador is expected to post earnings of $10.90 per share on $2.88 billion in revenues. This represents a 156.47% change in EPS on a 73.43% change in revenues. For the next fiscal year, the company is expected to earn $9.61 per share on $2.82 billion in revenues. This represents a year-over-year change of -11.83% and -2.39%, respectively.
Valuation Metrics
Matador may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Matador has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 5.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 5.8X. On a trailing cash flow basis, the stock currently trades at 8X versus its peer group's average of 6.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Matador currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Matador passes the test. Thus, it seems as though Matador shares could have a bit more room to run in the near term.
How Does MTDR Stack Up to the Competition?
Shares of MTDR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Diamondback Energy, Inc. (FANG - Free Report) . FANG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Diamondback Energy, Inc. beat our consensus estimate by 9.70%, and for the current fiscal year, FANG is expected to post earnings of $25.51 per share on revenue of $9.47 billion.
Shares of Diamondback Energy, Inc. have gained 13.1% over the past month, and currently trade at a forward P/E of 5.74X and a P/CF of 8.08X.
The Oil and Gas - Exploration and Production - United States industry is in the top 2% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MTDR and FANG, even beyond their own solid fundamental situation.
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Matador Resources Company (MTDR) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Matador Resources (MTDR - Free Report) ? Shares have been on the move with the stock up 15.2% over the past month. The stock hit a new 52-week high of $59.32 in the previous session. Matador Resources has gained 57.5% since the start of the year compared to the 37.9% move for the Zacks Oils-Energy sector and the 58.3% return for the Zacks Oil and Gas - Exploration and Production - United States industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 26, 2022, Matador reported EPS of $2.32 versus consensus estimate of $2.05 while it missed the consensus revenue estimate by 7.11%.
For the current fiscal year, Matador is expected to post earnings of $10.90 per share on $2.88 billion in revenues. This represents a 156.47% change in EPS on a 73.43% change in revenues. For the next fiscal year, the company is expected to earn $9.61 per share on $2.82 billion in revenues. This represents a year-over-year change of -11.83% and -2.39%, respectively.
Valuation Metrics
Matador may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Matador has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 5.3X current fiscal year EPS estimates, which is not in-line with the peer industry average of 5.8X. On a trailing cash flow basis, the stock currently trades at 8X versus its peer group's average of 6.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Matador currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Matador passes the test. Thus, it seems as though Matador shares could have a bit more room to run in the near term.
How Does MTDR Stack Up to the Competition?
Shares of MTDR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Diamondback Energy, Inc. (FANG - Free Report) . FANG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Diamondback Energy, Inc. beat our consensus estimate by 9.70%, and for the current fiscal year, FANG is expected to post earnings of $25.51 per share on revenue of $9.47 billion.
Shares of Diamondback Energy, Inc. have gained 13.1% over the past month, and currently trade at a forward P/E of 5.74X and a P/CF of 8.08X.
The Oil and Gas - Exploration and Production - United States industry is in the top 2% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MTDR and FANG, even beyond their own solid fundamental situation.