December 28, 2023
Top 10 Stock Matador Resources 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 December 28, 2023 in the market index Oil & Gas because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for Matador Resources on December 28, 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° View Matador Resources Buy
| 360 METRICS | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 44 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| SENTIMENT | ||||||||
| SENTIMENT | 35 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock Matador Resources are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Matador Resources. The consolidated Growth Rank has a good rank of 87, 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 87% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 66 which means that the company has a financing structure that is safer than 66% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 44 which means that the share price of Matador Resources is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 56% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 35, which means that professional investors are more pessimistic about the stock than for 65% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 65, Matador Resources is better positioned than 65% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 87), and the company is safely financed (Safety Rank of 66). However, professional market sentiment is low(Sentiment Rank of 35). The negative market view on Matador Resources may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Matador Resources only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 35 (better than 35% compared with alternatives), overall professional sentiment and engagement for the stock Matador Resources is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Matador Resources. Analyst Opinions are at a rank of 83 (better than 83% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 43, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Matador Resources. The Professional Investors rank is also low at 32, meaning that professional investors hold less stock in this company than in 68% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 11, which means that the current professional news and professional social networks are critical of this company (more negative news than for 89% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 35 (less encouraging than 65% compared with investment alternatives), Matador Resources has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Matador Resources Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 44 (worse than 56% 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 below average for Matador Resources. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 69, which means that the stock price compared with what market professionals expect for future profits is lower than for 69% of comparable companies, indicating a good value concerning Matador Resources's profit levels. But Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than for 62% of comparable companies, indicating a low value concerning Matador Resources's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 45 and for dividend yield, which is lower than for 67% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 44, is a hold recommendation based on Matador Resources's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Matador Resources is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more
Growth Strategy: Matador Resources Growth Momentum high
| GROWTH METRICS | December 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 86 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 64 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 75 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 59 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 87 |
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ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% compared with alternatives) for 2023, Matador Resources shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Matador Resources. Sales Growth has a value of 86, which means that, currently, professionals expect the company to grow more than 86% of its competitors. The same is valid for Profit Growth with a value of 64 and for Capital Growth with 75. In addition, Stock Returns had an above-average rank value of 59, which means they have been higher than 59% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Matador Resources exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Matador Resources Debt Financing Safety above-average
| SAFETY METRICS | December 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 54 |
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| REFINANCING | ||||||||
| REFINANCING | 68 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 65 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 66 |
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ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Matador Resources has financing practices on the safer side, which mean that their overall debt burden is lower than average. 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 68, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 68% 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 a consolidated Safety Rank of 66 (better than 66% compared with alternatives), Matador Resources has a financing structure that is 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 | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 44 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% 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 Value Rank of 44 (worse than 56% of alternatives). But they show above-average growth (Growth Rank of 87) and are safely financed (Safety Rank of 66, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 86, 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 44), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 87). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 66) 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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