The firm said it lowered its rating on the independent energy company based on a valuation call.
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"We rate MATADOR RESOURCES CO (MTDR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates MATADOR RESOURCES CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
- The revenue growth greatly exceeded the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 34.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 189.28% and other important driving factors, this stock has surged by 121.13% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MTDR should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MATADOR RESOURCES CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MATADOR RESOURCES CO turned its bottom line around by earning $0.76 versus -$0.59 in the prior year. This year, the market expects an improvement in earnings ($1.23 versus $0.76).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 205.5% when compared to the same quarter one year prior, rising from -$15.51 million to $16.36 million.
- The gross profit margin for MATADOR RESOURCES CO is currently very high, coming in at 79.24%. It has increased significantly from the same period last year. Along with this, the net profit margin of 22.11% significantly outperformed against the industry average.
- You can view the full analysis from the report here: MTDR Ratings Report