May 18, 2023
Top 10 Stock Matador Resources Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Matador Resources – Top 10 Stock in Oil & Gas Mining and Production
Matador Resources is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 79 (top 79% performer), Obermatt assesses an overall strong buy recommendation for Matador Resources on May 18, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Matador Resources Strong Buy
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 79 |
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ANALYSIS: With an Obermatt 360° View of 79 (better than 79% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Matador Resources are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Matador Resources. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 73% of competitors in the same industry. The consolidated Safety Rank at 75 means that the company has a financing structure that is safer than 75 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 51, which means that professional investors are more optimistic about the stock than for 51% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 47, meaning that the share price of Matador Resources is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 53% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a 360° View of 79, Matador Resources is better than 79% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 73), a safe financing structure (Safety Rank of 75), and positive professional market sentiment (Sentiment Rank of 51), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Matador Resources compared with alternatives? You can use the following rule of dumb: The growth rank reflects where the growth momentum of the company is (73% better than peers). The value rank could be the reverse reflection of that (27%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Matador Resources positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock Matador Resources is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Matador Resources. Analyst Opinions are at a rank of 53 (better than 53% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 54, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Matador Resources. Finally, the Professional Investors rank is 72, which means that currently, professional investors hold more stock in this company than in 72% of alternative investment opportunities. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Matador Resources has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 16, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 84% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Matador Resources is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Matador Resources Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), Matador Resources shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Matador Resources. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value regarding Matador Resources's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 64% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 50. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 33% of all competitors have even lower dividend yields than Matador Resources (an Dividend Yield Rank of 33). 67% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a HOLD recommendation based on Matador Resources's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Matador Resources Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Matador Resources shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Matador Resources. Sales Growth has a rank of 88 which means that currently, professionals expect the company to grow more than 88% of its competitors. Both Profit Growth, with a rank of 52, and Stock Returns, with a rank of 55, are also above average. But Capital Growth only has a rank of 30, which means that, currently, professionals expect the company to grow its invested capital less than 70% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a BUY recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Matador Resources Debt Financing Safety very solid
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 54 |
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| REFINANCING | ||||||||
| REFINANCING | 95 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 65 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 75 |
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ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2023, the company Matador Resources has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Matador Resources is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Matador Resources. Leverage is at 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Refinancing is at a rank of 95, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 95% of its competitors. Finally, Liquidity is also good at a rank of 65, which means that the company generates more profit to service its debt than 65% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives), Matador Resources has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Matador Resources Top Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| COMBINED | ||||||||
| COMBINED | 87 |
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ANALYSIS: With an Obermatt Combined Rank of 87 (better than 87% compared with investment alternatives), Matador Resources (Oil & Gas Production, USA) shares have much better financial characteristics than comparable stocks. Shares of Matador Resources are low in value (priced high) with a consolidated Obermatt Value Rank of 47 (worse than 53% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 75, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 87, is a strong buy recommendation based on Matador Resources's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Matador Resources exhibits low value (Obermatt Value Rank of 47), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 75) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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