Rattler Midstream (NasdaqGS:RTLR) - Share price, News & Analysis

Q: What is the Fair Price of RTLR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RTLR ($13.72) is trading below our estimate of [[fair value]] ($21.57)

RTLR fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	3/6
Financial Health	3/6
Dividends	2/6

RTLR Stock Overview

Rattler Midstream LP owns, operates, develops, and acquires midstream and energy-related infrastructure assets in the Midland and Delaware Basins of the Permian Basin.

Rewards

Trading at 36.4% below our estimate of its fair value

Earnings are forecast to grow 19.83% per year

Risk Analysis

Dividend of 8.75% is not well covered by earnings or forecast to be in the next 3 years

Has a high level of debt

Rattler Midstream Competitors

Delek Logistics Partners

NYSE:DKL

US$2.2b

Plains GP Holdings

NasdaqGS:PAGP

US$2.5b

Holly Energy Partners

NYSE:HEP

US$2.0b

Excelerate Energy

NYSE:EE

US$2.4b

Price History & Performance

Summary of all time highs, changes and price drops for Rattler Midstream
Historical stock prices
Current Share Price	US$13.72
52 Week High	US$18.22
52 Week Low	US$9.51
Beta	3.02
1 Month Change	-20.09%
3 Month Change	-1.79%
1 Year Change	25.64%
3 Year Change	-29.02%
5 Year Change	n/a
Change since IPO	-28.69%

Shareholder Returns

	RTLR	US Oil and Gas	US Market
7D	-2.8%	0.07%	1.6%
1Y	25.6%	31.4%	-20.8%

Return vs Industry: RTLR underperformed the US Oil and Gas industry which returned 37.9% over the past year.

Return vs Market: RTLR exceeded the US Market which returned -20.4% over the past year.

Price Volatility

Is RTLR's price volatile compared to industry and market?
RTLR volatility
RTLR Average Weekly Movement	7.8%
Oil and Gas Industry Average Movement	8.8%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: RTLR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: RTLR's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2018	n/a	Travis Stice	https://www.rattlermidstream.com

Rattler Midstream LP owns, operates, develops, and acquires midstream and energy-related infrastructure assets in the Midland and Delaware Basins of the Permian Basin. The company provides crude oil and water-related midstream services. As of December 31, 2021, it owned and operated 866 miles of crude oil, sourced water, and produced water gathering pipelines on acreage that overlays Diamondback Energy, Inc.’s core Midland and Delaware Basin development areas.

Rattler Midstream Fundamentals Summary

How do Rattler Midstream's earnings and revenue compare to its market cap?
RTLR fundamental statistics
Market Cap	US$2.09b
Earnings (TTM)	US$36.83m
Revenue (TTM)	US$401.00m

14.2x

P/E Ratio

1.3x

P/S Ratio

Is RTLR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RTLR income statement (TTM)
Revenue	US$401.00m
Cost of Revenue	US$144.13m
Gross Profit	US$256.87m
Other Expenses	US$220.03m
Earnings	US$36.83m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.97
Gross Margin	64.06%
Net Profit Margin	9.19%
Debt/Equity Ratio	62.4%

How did RTLR perform over the long term?

See historical performance and comparison

Dividends

8.7%

Current Dividend Yield

119%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is RTLR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RTLR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RTLR. This is calculated by dividing RTLR's market cap by their current preferred multiple.
What is RTLR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$2.09b

RTLR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.1x
Enterprise Value/EBITDA	9x
PEG Ratio	0.7x

Price to Earnings Ratio vs Peers

How does RTLR's PE Ratio compare to its peers?

RTLR PE Ratio vs Peers

The above table shows the PE ratio for RTLR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	56.7x
DKL Delek Logistics Partners	12.9x	16.8%	US$2.2b
PAGP Plains GP Holdings	169.8x	85.7%	US$2.5b
HEP Holly Energy Partners	10.2x	8.2%	US$2.0b
EE Excelerate Energy	33.9x	49.0%	US$2.4b
RTLR Rattler Midstream	14.2x	19.8%	US$2.1b

Forward PE

Price-To-Earnings vs Peers: RTLR is good value based on its Price-To-Earnings Ratio (14.2x) compared to the peer average (56.7x).

Price to Earnings Ratio vs Industry

How does RTLR's PE Ratio compare vs other companies in the US Oil and Gas Industry?

Price-To-Earnings vs Industry: RTLR is expensive based on its Price-To-Earnings Ratio (14.2x) compared to the US Oil and Gas industry average (12x)

Price to Earnings Ratio vs Fair Ratio

What is RTLR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RTLR PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.2x
Fair PE Ratio	19x

Price-To-Earnings vs Fair Ratio: RTLR is good value based on its Price-To-Earnings Ratio (14.2x) compared to the estimated Fair Price-To-Earnings Ratio (19x).

Share Price vs Fair Value

What is the Fair Price of RTLR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RTLR ($13.72) is trading below our estimate of fair value ($21.57)

Significantly Below Fair Value: RTLR is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: RTLR is good value based on its PEG Ratio (0.7x)

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Future Growth

How is Rattler Midstream forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

19.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RTLR's forecast earnings growth (19.8% per year) is above the savings rate (1.9%).

Earnings vs Market: RTLR's earnings (19.8% per year) are forecast to grow faster than the US market (13.7% per year).

High Growth Earnings: RTLR's earnings are forecast to grow, but not significantly.

Revenue vs Market: RTLR's revenue (3% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: RTLR's revenue (3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if RTLR's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Rattler Midstream performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RTLR has high quality earnings.

Growing Profit Margin: RTLR's current net profit margins (9.2%) are higher than last year (6.5%).

Past Earnings Growth Analysis

Earnings Trend: RTLR's earnings have declined by 5% per year over the past 5 years.

Accelerating Growth: RTLR's earnings growth over the past year (43.5%) exceeds its 5-year average (-5% per year).

Earnings vs Industry: RTLR earnings growth over the past year (43.5%) underperformed the Oil and Gas industry 102.2%.

Return on Equity

High ROE: RTLR's Return on Equity (15.1%) is considered low.

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Financial Health

How is Rattler Midstream's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RTLR's short term assets ($92.2M) exceed its short term liabilities ($59.1M).

Long Term Liabilities: RTLR's short term assets ($92.2M) do not cover its long term liabilities ($757.4M).

Debt to Equity History and Analysis

Debt Level: RTLR's net debt to equity ratio (61.2%) is considered high.

Reducing Debt: Insufficient data to determine if RTLR's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: RTLR's debt is well covered by operating cash flow (35.3%).

Interest Coverage: RTLR's interest payments on its debt are well covered by EBIT (5.3x coverage).

Balance Sheet

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Dividend

What is Rattler Midstream current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

8.75%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: RTLR's dividend (8.75%) is higher than the bottom 25% of dividend payers in the US market (1.59%).

High Dividend: RTLR's dividend (8.75%) is in the top 25% of dividend payers in the US market (4.25%)

Stability and Growth of Payments

Stable Dividend: RTLR has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: RTLR's dividend payments have increased, but the company has only paid a dividend for 3 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (118.8%), RTLR's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (374.3%), RTLR's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure

CEO

Travis Stice (59 yo)

3.92yrs

Tenure

Mr. Travis D. Stice is Chief Executive Officer and Director at QEP Resources, Inc. since March 17, 2021. He has been the Chief Executive Officer and Director of Energen Corporation since November 29, 2018....

Leadership Team

Experienced Management: RTLR's management team is considered experienced (3.9 years average tenure).

Board Members

Experienced Board: RTLR's board of directors are considered experienced (3.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31