Value
9.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| P/S | 9.1 |
| EV/EBITDA | 8.9 |
| Fwd P/E | 9.9 |
| PEG | 8.5 |
| Analyst target | 9.0 |
- ▸Forward P/E: 5.7x
- ▸PEG: 0.75
- ▸Attractively valued
MTDR · Why this verdict
Why Matador Resources (MTDR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Matador has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 13.9%, demonstrating disciplined cost management and production execution even in a volatile commodity environment. Earnings | The company beats earnings estimates by at least 8% in the next quarterly report due in approximately 42 days. | →Stable |
| CounterThe strong beat streak coincided with a period of relatively elevated oil prices; declining revenue of -6% year-over-year suggests volume growth is not keeping pace with expenditure, and a price decline would compress margins rapidly. | ||
Approximately 99% of production is concentrated in the Delaware Basin and 58% of production is oil, meaning the company's revenues and earnings are highly sensitive to oil price movements and to any operational disruption in a single geographic area. Bear case | The company maintains Delaware Basin production above current levels without reporting any significant operational disruptions in 10-K or 8-K filings over the next 12 months. | →Stable |
| CounterGeographic concentration in the Delaware Basin also means the company has deep operational expertise in a highly productive and cost-advantaged formation, which can translate into consistently lower lifting costs relative to more diversified peers. | ||
The stock faces a commodity cycle peak warning with a forward-to-trailing earnings ratio of 0.44x, and price momentum scores only 2.9/10 with declining volume and the stock sitting at the upper 200-day moving average boundary, creating near-term technical headwinds. Warnings | Momentum score recovers above 4.0 and the stock builds a sustained base above $50 over the next 6 months. | →Stable |
| CounterThe stock sits above its 200-day moving average and a recent extreme gap down of -5.5% may represent a potential reversal point, especially given that the technical score is 7.8/10 indicating strong support and resistance levels. | ||
Matador trades at a forward price-to-earnings ratio of 5.8x with a price-to-earnings-to-growth ratio of 0.79, scoring 9.0/10 on value, making it one of the most attractively priced oil and gas producers relative to near-term earnings estimates. Valuation breakdown | The stock closes the gap to analyst targets and trades above $60 within 12 months as valuation discount narrows. | →Stable |
| CounterA forward multiple this low in an energy company often reflects the market's view that current earnings are unsustainably high due to elevated commodity prices, and mean-reversion in oil prices could make the current multiple look appropriate in hindsight. | ||
Matador has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 13.9%, demonstrating disciplined cost management and production execution even in a volatile commodity environment.
→StableEarnings
- Expectation
- The company beats earnings estimates by at least 8% in the next quarterly report due in approximately 42 days.
CounterThe strong beat streak coincided with a period of relatively elevated oil prices; declining revenue of -6% year-over-year suggests volume growth is not keeping pace with expenditure, and a price decline would compress margins rapidly.
Approximately 99% of production is concentrated in the Delaware Basin and 58% of production is oil, meaning the company's revenues and earnings are highly sensitive to oil price movements and to any operational disruption in a single geographic area.
→StableBear case
- Expectation
- The company maintains Delaware Basin production above current levels without reporting any significant operational disruptions in 10-K or 8-K filings over the next 12 months.
CounterGeographic concentration in the Delaware Basin also means the company has deep operational expertise in a highly productive and cost-advantaged formation, which can translate into consistently lower lifting costs relative to more diversified peers.
The stock faces a commodity cycle peak warning with a forward-to-trailing earnings ratio of 0.44x, and price momentum scores only 2.9/10 with declining volume and the stock sitting at the upper 200-day moving average boundary, creating near-term technical headwinds.
→StableWarnings
- Expectation
- Momentum score recovers above 4.0 and the stock builds a sustained base above $50 over the next 6 months.
CounterThe stock sits above its 200-day moving average and a recent extreme gap down of -5.5% may represent a potential reversal point, especially given that the technical score is 7.8/10 indicating strong support and resistance levels.
Matador trades at a forward price-to-earnings ratio of 5.8x with a price-to-earnings-to-growth ratio of 0.79, scoring 9.0/10 on value, making it one of the most attractively priced oil and gas producers relative to near-term earnings estimates.
→StableValuation breakdown
- Expectation
- The stock closes the gap to analyst targets and trades above $60 within 12 months as valuation discount narrows.
CounterA forward multiple this low in an energy company often reflects the market's view that current earnings are unsustainably high due to elevated commodity prices, and mean-reversion in oil prices could make the current multiple look appropriate in hindsight.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Matador Resources is an attractively valued oil and gas producer trading at 5.8x forward earnings with a perfect 4-quarter earnings beat streak and 27% analyst-implied upside, but concentrated exposure to the Delaware Basin and oil prices creates meaningful downside risk if commodity prices mean-revert.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.4 |
| ROA | 3.2 |
| Gross margin | 10.0 |
| Op margin | 2.0 |
| Net margin | 6.7 |
| Current ratio | 2.9 |
| FCF quality | 0.0 |
| Moat | 5.4 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Earnings quality RED FLAG: -55% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: -14 (fail)
Growth
0.9/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.9 |
- ▸Declining revenue: -6%
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.4 |
| MACD | 6.7 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 4.7 |
- ▸Uptrend pullback (RSI 31) - buy opportunity
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.5 |
| Analyst rating | 8.9 |
| Price target | 9.3 |
- ▸Analyst upside: 43%
Insider
5.3/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 5.1 |
- ▸Insider buying (low materiality) — $681,443 (0.011% of mkt cap)
Peer rank
3.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.0 |
| quality rank | 5.2 |
| growth rank | 2.6 |
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.7 |
| support resistance | 7.8 |
| 52w position | 5.1 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.6 |
| days to cover | 2.9 |
| volatility | 4.2 |
| put call | 5.3 |
| implied vol | 3.4 |
| beta | 8.6 |
| debt equity | 7.4 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.5 |
| dividend safety | 7.0 |
| news activity | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 299.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:6.8>=5.5
- ASYMMETRY:4.4>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
Failed (1)
- MATERIALS_CYCLE_PEAK:fwd=5.7x,ratio=0.44x
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
4.37
Upside
+29.0%
Downside
6.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 9.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MATERIALS_CYCLE_PEAK:fwd=5.7x,ratio=0.44x) reinforce the read. Current asymmetry R:R is 4.37 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 9.0, Sentiment at 7.9, and Catalyst at 7.1; the weakest are Growth at 0.9, Peer rank at 3.2, and Quality at 4.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 4.37 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Forward Earnings
Trip ifForward price-to-earnings ratio rises above 10x due to a reduction in earnings estimates greater than 30%, signaling commodity price deterioration.
- P2Perfect Earnings Beat Streak
Trip ifActual EPS falls below the consensus estimate by more than 10% in the next quarterly report.
- P3Delaware Basin Concentration Risk
Trip ifThe company reports an operational disruption that reduces Delaware Basin production by more than 15% in any quarterly filing.
- P4Commodity Cycle Peak Momentum Headwind
Trip ifStock price drops below $49.30, the stop-loss support level, on a closing basis.