Matador Resources Company (NYSE:MTDR) Just Released Its Yearly Earnings: Here's What Analysts Think

A week ago, Matador Resources Company (NYSE:MTDR) came out with a strong set of annual numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of US$2.8b arriving 3.1% ahead of forecasts. Statutory earnings per share (EPS) were US$7.05, 3.2% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Matador Resources

Taking into account the latest results, the most recent consensus for Matador Resources from eight analysts is for revenues of US$3.39b in 2024. If met, it would imply a sizeable 20% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to reduce 2.9% to US$6.87 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$3.31b and earnings per share (EPS) of US$7.66 in 2024. So it's pretty clear the analysts have mixed opinions on Matador Resources after the latest results; even though they upped their revenue numbers, it came at the cost of a substantial drop in per-share earnings expectations.

The consensus price target was unchanged at US$70.50, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Matador Resources, with the most bullish analyst valuing it at US$84.00 and the most bearish at US$62.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Matador Resources' revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2024 being well below the historical 31% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 1.3% per year. Even after the forecast slowdown in growth, it seems obvious that Matador Resources is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Matador Resources. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Matador Resources. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Matador Resources going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Matador Resources has 1 warning sign we think you should be aware of.

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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.