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Matador (MTDR) Down 9.3% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Matador Resources (MTDR - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Matador due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Matador Resources Company reported second-quarter 2024 adjusted earnings of $2.05 per share, which beat the Zacks Consensus Estimate of $1.75. The bottom line also improved from the year-ago quarter’s $1.42.
Total quarterly revenues of $847.1 million beat the Zacks Consensus Estimate of $817 million. The top line also increased from the year-ago quarter’s $638.1 million.
Strong second-quarter results were aided by Matador’s high total production volume, along with an increase in the realized price of oil.
Upstream Business in Q2
Since MTDR is engaged in oil and gas exploration and production activities, the fate of its overall business primarily depends on the oil and gas pricing scenario. The majority of Matador’s production comprises oil (60% of total production in the second quarter), making this commodity’s price the prime factor in determining the company’s earnings.
Matador achieved a record average oil production per day in the second quarter of 2024, surpassing its anticipated average by 3%.
Let us take a look at Matador’s average commodity sales price, along with production.
Average Sales Price of Commodities
MTDR reported second-quarter 2024 average sales price for oil (without realized derivatives) at $81.20 per barrel, up from $73.46 in the year-ago period. The commodity price was also higher than our projection of $80.68 per barrel. The price of natural gas was $2 per thousand cubic feet (Mcf), which slipped from $2.61 in the year-ago quarter and was also below our estimate of $2.64 Mcf.
Increasing Production
Matador reported second-quarter 2024 oil production of 95,488 barrels per day (B/D), up from 76,345 B/D in the prior-year quarter. The figure also beat our estimate of 93,179.4 B/D. Natural gas production was recorded at 388.9 million cubic feet per day (MMcf/D), up from 326 MMcf/D recorded a year ago. The reported figure also outpaced our estimate of 386.3 MMcf/D.
The outperformance was largely due to the unprecedented 47 gross (38.6 net) operated horizontal wells turned to sales during this period, marking the highest number in the company's history. The company consistently delivered robust well results across its asset areas in the northern Delaware Basin. This includes the 21 gross (19 net) Dagger Lake South wells in the Antelope Ridge asset area, which were acquired through last year's Advance acquisition.
Total oil equivalent production in the second quarter was 160,305 BOE/D, which surged from the year-ago quarter’s 130,683 BOE/D and surpassed our projection of 157,558 BOE/D.
Operating Expenses
MTDR’s plant and other midstream services’ operating expenses declined to $2.55 per BOE from the year-earlier level of $2.58. Our estimate for the same was pinned at $3.23.
However, lease operating costs increased from $5.13 per BOE in second-quarter 2023 to $5.42 in the reported quarter. Our projection for the metric was pinned at $5.18 per BOE. Production taxes, transportation and processing costs increased to $5.27 per BOE from $5.21 in the year-ago quarter.
Total operating expenses per BOE were $30.64, higher than the prior-year figure of $30.10 but below our estimate of $31.69.
Balance Sheet & Capital Spending
As of Jun 30, 2024, Matador had cash and restricted cash of $63.9 million, and a long-term debt of $1,981.6 million. The company spent $375 million for the drilling, completion and equipment of wells in the second quarter.
Outlook
For 2024, Matador revised its average daily oil equivalent production upward to 158,500-163,500 BOE/d, a 3.2% increase from the previous guidance. It also expects full-year lease operating expenses of $5.25-$5.75 per BOE.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Matador has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Matador has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Matador (MTDR) Down 9.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Matador Resources (MTDR - Free Report) . Shares have lost about 9.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Matador due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Matador Q2 Earnings Beat Estimates, Ups '24 Output Guidance
Matador Resources Company reported second-quarter 2024 adjusted earnings of $2.05 per share, which beat the Zacks Consensus Estimate of $1.75. The bottom line also improved from the year-ago quarter’s $1.42.
Total quarterly revenues of $847.1 million beat the Zacks Consensus Estimate of $817 million. The top line also increased from the year-ago quarter’s $638.1 million.
Strong second-quarter results were aided by Matador’s high total production volume, along with an increase in the realized price of oil.
Upstream Business in Q2
Since MTDR is engaged in oil and gas exploration and production activities, the fate of its overall business primarily depends on the oil and gas pricing scenario. The majority of Matador’s production comprises oil (60% of total production in the second quarter), making this commodity’s price the prime factor in determining the company’s earnings.
Matador achieved a record average oil production per day in the second quarter of 2024, surpassing its anticipated average by 3%.
Let us take a look at Matador’s average commodity sales price, along with production.
Average Sales Price of Commodities
MTDR reported second-quarter 2024 average sales price for oil (without realized derivatives) at $81.20 per barrel, up from $73.46 in the year-ago period. The commodity price was also higher than our projection of $80.68 per barrel. The price of natural gas was $2 per thousand cubic feet (Mcf), which slipped from $2.61 in the year-ago quarter and was also below our estimate of $2.64 Mcf.
Increasing Production
Matador reported second-quarter 2024 oil production of 95,488 barrels per day (B/D), up from 76,345 B/D in the prior-year quarter. The figure also beat our estimate of 93,179.4 B/D. Natural gas production was recorded at 388.9 million cubic feet per day (MMcf/D), up from 326 MMcf/D recorded a year ago. The reported figure also outpaced our estimate of 386.3 MMcf/D.
The outperformance was largely due to the unprecedented 47 gross (38.6 net) operated horizontal wells turned to sales during this period, marking the highest number in the company's history. The company consistently delivered robust well results across its asset areas in the northern Delaware Basin. This includes the 21 gross (19 net) Dagger Lake South wells in the Antelope Ridge asset area, which were acquired through last year's Advance acquisition.
Total oil equivalent production in the second quarter was 160,305 BOE/D, which surged from the year-ago quarter’s 130,683 BOE/D and surpassed our projection of 157,558 BOE/D.
Operating Expenses
MTDR’s plant and other midstream services’ operating expenses declined to $2.55 per BOE from the year-earlier level of $2.58. Our estimate for the same was pinned at $3.23.
However, lease operating costs increased from $5.13 per BOE in second-quarter 2023 to $5.42 in the reported quarter. Our projection for the metric was pinned at $5.18 per BOE. Production taxes, transportation and processing costs increased to $5.27 per BOE from $5.21 in the year-ago quarter.
Total operating expenses per BOE were $30.64, higher than the prior-year figure of $30.10 but below our estimate of $31.69.
Balance Sheet & Capital Spending
As of Jun 30, 2024, Matador had cash and restricted cash of $63.9 million, and a long-term debt of $1,981.6 million. The company spent $375 million for the drilling, completion and equipment of wells in the second quarter.
Outlook
For 2024, Matador revised its average daily oil equivalent production upward to 158,500-163,500 BOE/d, a 3.2% increase from the previous guidance. It also expects full-year lease operating expenses of $5.25-$5.75 per BOE.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Matador has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Matador has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.