Growth Investors: Industry Analysts Just Upgraded Their Matador Resources Company (NYSE:MTDR) Revenue Forecasts By 16%

Matador Resources Company (NYSE:MTDR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the consensus from four analysts covering Matador Resources is for revenues of US$2.9b in 2023, implying a discernible 8.0% decline in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$2.5b of revenue in 2023. It looks like there's been a clear increase in optimism around Matador Resources, given the nice increase in revenue forecasts.

View our latest analysis for Matador Resources

We'd point out that there was no major changes to their price target of US$73.23, suggesting the latest estimates were not enough to shift their view on the value of the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Matador Resources at US$94.00 per share, while the most bearish prices it at US$65.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Matador Resources' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.0% by the end of 2023. This indicates a significant reduction from annual growth of 33% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 6.3% per year. The forecasts do look bearish for Matador Resources, since they're expecting it to shrink faster than the industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Matador Resources this year. They're also forecasting for revenues to shrink at a quicker rate than companies in the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Matador Resources.

Better yet, our automated discounted cash flow calculation (DCF) suggests Matador Resources could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.