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RTLR

Rattler Midstream LPNasdaqGS:RTLR Stock Report

Market Cap US$2.2b
Share Price
n/a
US$16
n/aintrinsic discount
1Y45.0%
7D3.5%
1D
Portfolio Value
​
View

Rattler Midstream LP

NasdaqGS:RTLR Stock Report

Market Cap: US$2.2b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

Rattler Midstream (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. More details

RTLR fundamental analysis
Snowflake Score
Valuation3/6
Future Growth3/6
Past Performance3/6
Financial Health3/6
Dividends2/6

Rewards

Trading at 28.9% below our estimate of its fair value

Earnings are forecast to grow 56.96% per year

Risk Analysis

Dividend of 7.88% is not well covered by earnings or forecast to be in the next 3 years

Has a high level of debt


RTLR Community Fair Values

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Rattler Midstream LP Competitors

Price History & Performance

Summary of share price highs, lows and changes for Rattler Midstream
Historical stock prices
Current Share PriceUS$15.22
52 Week HighUS$18.22
52 Week LowUS$10.28
Beta2.82
1 Month Change14.95%
3 Month Change-11.36%
1 Year Change44.95%
3 Year Change-15.73%
5 Year Changen/a
Change since IPO-20.89%

Recent News & Updates

Seeking Alpha • Jun 30

Rattler Midstream: Rearranged Portfolio Performs Well

The partnership posted a positive comparison to the previous fiscal year first quarter. But Rattler Midstream's results slipped somewhat from the fourth quarter. This was the first quarter that had the effect of a sale and some acquisitions. Therefore any comparisons may not be apples to apples. Cash flow climbed from the equity investments and is expected to continue to climb. The swing from the capital contributions to the joint ventures to now climbing cash income will be very significant to the partnership. Author's note: This article was originally posted May 3, 2022, in the Marketplace service, and has been updated to include current information. Rattler Midstream (RTLR) posted a positive comparison for the first quarter. Management, however, focused the market attention on a fourth quarter comparison which was not favorable. But the comparison may be overly conservative because the fourth quarter saw some rearrangement of the company portfolio of projects. Therefore, a quarter or two of "housecleaning" may be in order before results are comparable. So, why write this now after Diamondback Energy (FANG) announced they would acquire Rattler? Simply because Rattler has put itself in a position to grow earnings without a lot of capital needs. This may not be a large part of Diamondback once it is merged back into the company. However, the ability to generate more cash without a lot of capital expenditures is in sharp contrast to the unconventional business. Any sort of cash flow (which will now translate into cost savings) is a big deal in a cyclical industry. Furthermore, I intend to keep my Diamondback shares received as that dividend is rapidly growing. I may be "stuck" with the base dividend alone during a downturn. But Diamondback has a long history of accretive acquisitions. That history is very likely to continue the base dividend growth in the future. Rattler Midstream First Quarter Results And Portfolio Positioning (Rattler Midstream First Quarter 2022, Earnings Conference Call Slides) Clearly management made some moves to rearrange the operations so that the organization overall would have the needed assets in the right place. That led to a decline in earnings from the fourth quarter as management noted. Anytime the portfolio gets rearranged, there will be some one-time fees and optimization expenses. Since growth in the midstream industry is often single digits, then investors should not be surprised that there was a first quarter decline in earnings when compared to the fourth quarter. The reported earnings were still better than the year ago period. Now that the industry recovery is clearly on the way, there is likely to be some better earnings on the horizon. That does not mean there won't be a pause for some optimization expenses as well as the continuing Diamondback Energy (FANG) effort to continue to optimize acquisitions made. Rattler Midstream First Quarter Cash Flow From Operating Activities (Rattler Midstream First Quarter 2022, Earnings Press Release) In the meantime, cash flow took a significant jump in the right direction during the first quarter. The prime reason for the cash flow increase was the distributions received shown above. Those distributions are coming from the long-haul joint ventures where the company has substantial money invested. Rattler Midstream Presentation Of Equity Investments (Rattler Midstream First Quarter 2022, Earnings Conference Call Slides) The significance of that receipt of some income from the joint ventures means that the transition from capital expenditures to build all these pipelines has begun to transition to a cash inflow for all the expenditures listed above. That is a tremendous cash swing in the right direction for a company of this size. Things like the OPEC pricing war followed by the coronavirus demand destruction delayed the transition to bigger cash receipts. The pipelines were not going to fill up without a more favorable pricing environment. That environment has now arrived. Evidently profits to distribute to the partners is now beginning to happen. The key for any Diamondback holder is that there are hundreds of millions of dollars in the long-haul pipeline. Long-term cash flow from those investments is about to accelerate in this environment of higher prices. Diamondback is going to be "in the catbird seat" holding interests in pipelines with excess capacity in a basin that is known to run into takeaway issues during the boom periods. The result is probably a rising return to a fair amount for all the partners including this company that spent some years building all of this. For Diamondback shareholders, those investments will be an important source of future earnings growth (and cash flow growth) that is not dependent upon the plans of Diamondback Energy. Note that there are still some capital contributions expected. But all the joint ventures shown above are now in service. So, there will be a way to fund any necessary capital contributions from the earnings of the joint ventures. The days of contributing large amounts of capital are clearly over. Rattler Midstream Presentation Of Diamondback Energy Growth History And Guidance (Rattler Midstream First Quarter 2022, Earnings Conference Call Slides) So far, the guidance offered by Diamondback Energy is for production about the same as the previous fiscal year. Then again, management made a small acquisition in the first quarter. This main Rattler customer has a long history of growing by acquisitions. So, the current "no growth" guidance could change not only with a small acquisition or two but also from the continuing advance of technology. The other consideration is that Rattler does not service all of the Diamondback operations. Therefore, Rattler can and is in fact very likely to show some growth in the current fiscal year despite the plans of the major customer. Once Rattler is acquired, that Rattler growth will likely translate into cost reductions for Diamondback customers. That means that earnings due to cost reductions may grow even if Diamondback itself does not grow production. Per share growth plans are likely to be enhanced by the repurchase of company shares from time to time. Management obviously believes the shares offer a good deal or the cash would be used elsewhere (or the distribution would be increased). It is very likely that shareholders need to be patient for a quarter or two. The operational picture of the new portfolio acquisitions is likely to clear up considerably by then. In the meantime, the partnership offers a distribution that usually has a considerable tax-free portion until the growth opportunities show on the quarterly reports. Currently, Diamondback management is reacting to the tight labor market and possible transportation constraints. But historically, this management and much of the industry will sooner or later react to the strong commodity pricing environment. That means the midstream business will at some point at least consider and probably will execute a major growth project or two. But that is nothing close to the growth and cash flow needs of the past.

Recent updates

Seeking Alpha • Jun 30

Rattler Midstream: Rearranged Portfolio Performs Well

The partnership posted a positive comparison to the previous fiscal year first quarter. But Rattler Midstream's results slipped somewhat from the fourth quarter. This was the first quarter that had the effect of a sale and some acquisitions. Therefore any comparisons may not be apples to apples. Cash flow climbed from the equity investments and is expected to continue to climb. The swing from the capital contributions to the joint ventures to now climbing cash income will be very significant to the partnership. Author's note: This article was originally posted May 3, 2022, in the Marketplace service, and has been updated to include current information. Rattler Midstream (RTLR) posted a positive comparison for the first quarter. Management, however, focused the market attention on a fourth quarter comparison which was not favorable. But the comparison may be overly conservative because the fourth quarter saw some rearrangement of the company portfolio of projects. Therefore, a quarter or two of "housecleaning" may be in order before results are comparable. So, why write this now after Diamondback Energy (FANG) announced they would acquire Rattler? Simply because Rattler has put itself in a position to grow earnings without a lot of capital needs. This may not be a large part of Diamondback once it is merged back into the company. However, the ability to generate more cash without a lot of capital expenditures is in sharp contrast to the unconventional business. Any sort of cash flow (which will now translate into cost savings) is a big deal in a cyclical industry. Furthermore, I intend to keep my Diamondback shares received as that dividend is rapidly growing. I may be "stuck" with the base dividend alone during a downturn. But Diamondback has a long history of accretive acquisitions. That history is very likely to continue the base dividend growth in the future. Rattler Midstream First Quarter Results And Portfolio Positioning (Rattler Midstream First Quarter 2022, Earnings Conference Call Slides) Clearly management made some moves to rearrange the operations so that the organization overall would have the needed assets in the right place. That led to a decline in earnings from the fourth quarter as management noted. Anytime the portfolio gets rearranged, there will be some one-time fees and optimization expenses. Since growth in the midstream industry is often single digits, then investors should not be surprised that there was a first quarter decline in earnings when compared to the fourth quarter. The reported earnings were still better than the year ago period. Now that the industry recovery is clearly on the way, there is likely to be some better earnings on the horizon. That does not mean there won't be a pause for some optimization expenses as well as the continuing Diamondback Energy (FANG) effort to continue to optimize acquisitions made. Rattler Midstream First Quarter Cash Flow From Operating Activities (Rattler Midstream First Quarter 2022, Earnings Press Release) In the meantime, cash flow took a significant jump in the right direction during the first quarter. The prime reason for the cash flow increase was the distributions received shown above. Those distributions are coming from the long-haul joint ventures where the company has substantial money invested. Rattler Midstream Presentation Of Equity Investments (Rattler Midstream First Quarter 2022, Earnings Conference Call Slides) The significance of that receipt of some income from the joint ventures means that the transition from capital expenditures to build all these pipelines has begun to transition to a cash inflow for all the expenditures listed above. That is a tremendous cash swing in the right direction for a company of this size. Things like the OPEC pricing war followed by the coronavirus demand destruction delayed the transition to bigger cash receipts. The pipelines were not going to fill up without a more favorable pricing environment. That environment has now arrived. Evidently profits to distribute to the partners is now beginning to happen. The key for any Diamondback holder is that there are hundreds of millions of dollars in the long-haul pipeline. Long-term cash flow from those investments is about to accelerate in this environment of higher prices. Diamondback is going to be "in the catbird seat" holding interests in pipelines with excess capacity in a basin that is known to run into takeaway issues during the boom periods. The result is probably a rising return to a fair amount for all the partners including this company that spent some years building all of this. For Diamondback shareholders, those investments will be an important source of future earnings growth (and cash flow growth) that is not dependent upon the plans of Diamondback Energy. Note that there are still some capital contributions expected. But all the joint ventures shown above are now in service. So, there will be a way to fund any necessary capital contributions from the earnings of the joint ventures. The days of contributing large amounts of capital are clearly over. Rattler Midstream Presentation Of Diamondback Energy Growth History And Guidance (Rattler Midstream First Quarter 2022, Earnings Conference Call Slides) So far, the guidance offered by Diamondback Energy is for production about the same as the previous fiscal year. Then again, management made a small acquisition in the first quarter. This main Rattler customer has a long history of growing by acquisitions. So, the current "no growth" guidance could change not only with a small acquisition or two but also from the continuing advance of technology. The other consideration is that Rattler does not service all of the Diamondback operations. Therefore, Rattler can and is in fact very likely to show some growth in the current fiscal year despite the plans of the major customer. Once Rattler is acquired, that Rattler growth will likely translate into cost reductions for Diamondback customers. That means that earnings due to cost reductions may grow even if Diamondback itself does not grow production. Per share growth plans are likely to be enhanced by the repurchase of company shares from time to time. Management obviously believes the shares offer a good deal or the cash would be used elsewhere (or the distribution would be increased). It is very likely that shareholders need to be patient for a quarter or two. The operational picture of the new portfolio acquisitions is likely to clear up considerably by then. In the meantime, the partnership offers a distribution that usually has a considerable tax-free portion until the growth opportunities show on the quarterly reports. Currently, Diamondback management is reacting to the tight labor market and possible transportation constraints. But historically, this management and much of the industry will sooner or later react to the strong commodity pricing environment. That means the midstream business will at some point at least consider and probably will execute a major growth project or two. But that is nothing close to the growth and cash flow needs of the past.
Seeking Alpha • May 01

Rattler Midstream Continues The Growth Story While Raising The Distribution

The distribution increased 20% effective in the current calendar year. The debt ratio will remain at a midstream industry leading 2.0 or lower. Common unit purchases will continue opportunistically. EBITDA is forecast to grow. Not much capital expenditures is needed in the near future to accommodate growth plans.
Seeking Alpha • Mar 21

Rattler Midstream: Another Big Distribution Increase, Although Expect A Wait For More

After already providing a big distribution increase as recently as the middle of 2021, Rattler Midstream has kicked-off 2022 with another big increase. This follows a solid year of cash flow performance that comes with an outlook for further double-digit growth year-on-year during 2022. Although at the same time, their higher capital expenditure guidance leaves very little room to fund higher distributions for the time being. Thankfully, this could change in 2023 and beyond as their earnings increase thanks to their higher capital expenditure, thereby providing scope for distribution growth to restart. Even though it seems wise to expect a wait for higher distributions, I still believe that a buy rating is appropriate given their already desirable high yield of 9%.
Analysis Article • Feb 27

Rattler Midstream (NASDAQ:RTLR) Is Paying Out A Larger Dividend Than Last Year

Rattler Midstream LP ( NASDAQ:RTLR ) will increase its dividend on the 14th of March to US$0.30. This will take the...
Seeking Alpha • Jan 08

Rattler Midstream: Keep Your Eyes On The Joint Ventures

Cash investments are nearly complete for all the joint ventures. Therefore, cash flow to invest has now become cash flow from joint venture distributions. There is a lot of capacity to fill without much capital demand needed to fill that capacity. At some point, cash flow will grow substantially as volumes handled increase across the business. This company offers that rare combination of growth and income.
Seeking Alpha • Nov 29

Rattler Midstream: Growth Paths Become More Apparent

This midstream is likely to grow faster than the average midstream company in the future. The joint ventures have moved from cash needing to cash flow. There has been a good looking dropdown and another investment in the current fiscal year. Lots of free cash flow to reinvest or distribute in the future is a good possibility. There are more opportunities ahead as Diamondback continues its likely historical rates of acquisitions combined with slower growth rates.
Analysis Article • Nov 07

Rattler Midstream (NASDAQ:RTLR) Is Increasing Its Dividend To US$0.25

The board of Rattler Midstream LP ( NASDAQ:RTLR ) has announced that it will be increasing its dividend on the 22nd of...
Seeking Alpha • Oct 17

Rattler Midstream LP: 8% Yield, Outperforming, Strong Q2 Growth, No K-1

RTLR yields 7.7%, with a conservative 19.78% Free Cash Flow Payout Ratio. It has several new projects online in 2021, with capex quickly winding down, which will pump up its Free Cash Flow. It has outperformed the market, but still looks undervalued vs. midstream averages.
Seeking Alpha • Sep 06

Rattler Midstream: Here Comes The Distribution Again

The distribution increased to $1 annual rate. Common Unit buybacks make less economic sense. The accumulating cash may be used to finance dropdowns from Diamondback Energy. The joint ventures will finally generate more cash than they need for investments. Diamondback will likely grow rapidly. That likely means that Rattler will also likely grow rapidly.
Seeking Alpha • Aug 28

Rattler Midstream: Big Dividend Increase With Even More To Follow

The small and relatively underfollowed Rattler Midstream has rewarded their unitholders with an impressive 25% increase to their already high-yielding distributions. After a rough first quarter of 2021, they saw very strong performance during the second quarter with their operating cash flow rebounding. When combined with their further capital expenditure reductions, they have ample free cash flow to not only cover their new distribution payments but also see even more growth. They also saw their net debt plunge by an impressive 10% during the second quarter of 2021 alone, which helps strengthen their already healthy financial position. Despite being named after a deadly snake, this rattler should not poison your portfolio and thus I still believe that my bullish rating is appropriate.
Analysis Article • Aug 12

We Think That There Are More Issues For Rattler Midstream (NASDAQ:RTLR) Than Just Sluggish Earnings

Rattler Midstream LP's ( NASDAQ:RTLR ) stock showed strength after its weak earnings report. Sometimes, shareholders...
Analysis Article • May 30

We Think Rattler Midstream (NASDAQ:RTLR) Is Taking Some Risk With Its Debt

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to...
Analysis Article • May 07

Rattler Midstream LP Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, Rattler Midstream LP ( NASDAQ:RTLR ) recently reported its quarterly numbers. It looks like a pretty...
Analysis Article • May 06

Rattler Midstream LP's (NASDAQ:RTLR) Intrinsic Value Is Potentially 71% Above Its Share Price

Today we will run through one way of estimating the intrinsic value of Rattler Midstream LP ( NASDAQ:RTLR ) by...
Analysis Article • Mar 18

Rattler Midstream LP (NASDAQ:RTLR) Stock Is Going Strong But Fundamentals Look Uncertain: What Lies Ahead ?

Rattler Midstream's (NASDAQ:RTLR) stock is up by a considerable 19% over the past three months. However, we decided to...
Analysis Article • Feb 28

Don't Race Out To Buy Rattler Midstream LP (NASDAQ:RTLR) Just Because It's Going Ex-Dividend

Rattler Midstream LP ( NASDAQ:RTLR ) is about to trade ex-dividend in the next 4 days. You can purchase shares before...
Analysis Article • Feb 16

Will Rattler Midstream's (NASDAQ:RTLR) Growth In ROCE Persist?

There are a few key trends to look for if we want to identify the next multi-bagger. In a perfect world, we'd like to...
Analysis Article • Jan 26

Is Rattler Midstream LP (NASDAQ:RTLR) A Good Dividend Stock?

Could Rattler Midstream LP ( NASDAQ:RTLR ) be an attractive dividend share to own for the long haul? Investors are...
Analysis Article • Jan 05

Here's Why Rattler Midstream (NASDAQ:RTLR) Can Manage Its Debt Responsibly

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...
Analysis Article • Dec 15

Rattler Midstream LP's (NASDAQ:RTLR) Stock Is Going Strong: Have Financials A Role To Play?

Rattler Midstream's (NASDAQ:RTLR) stock is up by a considerable 35% over the past three months. Given that stock prices...
Analysis Article • Nov 24

An Intrinsic Calculation For Rattler Midstream LP (NASDAQ:RTLR) Suggests It's 28% Undervalued

How far off is Rattler Midstream LP (NASDAQ:RTLR) from its intrinsic value? Using the most recent financial data...

Shareholder Returns

RTLRUS Oil and GasUS Market
7D3.5%-5.5%1.6%
1Y45.0%30.3%28.5%

Return vs Industry: RTLR underperformed the US Oil and Gas industry which returned 69% over the past year.

Return vs Market: RTLR exceeded the US Market which returned -14.3% over the past year.

Price Volatility

Is RTLR's price volatile compared to industry and market?
RTLR volatility
RTLR Average Weekly Movement8.0%
Oil and Gas Industry Average Movement6.4%
Market Average Movement7.2%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.0%

Stable Share Price: RTLR has not had significant price volatility in the past 3 months.

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

About the Company

FoundedEmployeesCEOWebsite
2018n/aTravis Sticewww.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 LP Fundamentals Summary

How do Rattler Midstream's earnings and revenue compare to its market cap?
RTLR fundamental statistics
Market capUS$2.23b
Earnings (TTM)US$36.26m
Revenue (TTM)US$404.23m
16.1x
P/E Ratio
1.4x
P/S Ratio

Is RTLR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
RTLR income statement (TTM)
RevenueUS$404.23m
Cost of RevenueUS$148.91m
Gross ProfitUS$255.32m
Other ExpensesUS$219.06m
EarningsUS$36.26m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.94
Gross Margin63.16%
Net Profit Margin8.97%
Debt/Equity Ratio62.0%

How did RTLR perform over the long term?

See historical performance and comparison

Dividends

7.9%
Current Dividend Yield
124%
Payout Ratio

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2022/08/25 03:35
End of Day Share Price 2022/08/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Rattler Midstream LP is covered by 16 analysts. 3 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Christopher TillettBarclays
Ujjwal PradhanBofA Global Research
Kyle MayCapital One Securities, Inc.