Matador Resources (MTDR): Evaluating Valuation After Expanded Credit Facilities and Lower Borrowing Costs

Matador Resources (MTDR) just locked in a reaffirmed 3.25 billion borrowing base on its reserves-based loan, while its San Mateo Midstream JV secured a 29% upsized credit facility to 1.10 billion.

See our latest analysis for Matador Resources.

Even with this stronger credit backdrop, Matador’s share price return has been under pressure this year, with a steep year to date decline and a softer 1 year total shareholder return. However, longer term total returns still point to meaningful wealth creation and suggest the recent weakness reflects shifting sentiment more than a broken thesis.

If you are weighing what comes next for energy names after this move, it could be a good moment to explore fast growing stocks with high insider ownership as potential fresh ideas.

With lenders doubling down and the stock now trading at a steep discount to analyst targets and its own cash generation, is Matador quietly setting up a compelling value entry point, or is the market already discounting future growth?

Most Popular Narrative Narrative: 28.2% Undervalued

Matador Resources last closed at 41.73, while the most followed narrative points to a materially higher fair value anchored in resilient cash generation.

Expanding midstream capacity and third party volumes (with the Marlan plant ramping toward full utilization and high third party repeat business) is set to deliver incremental, fee based revenues and improve overall net margins, making Matador less reliant on commodity prices and supporting sustained earnings growth.

Read the complete narrative.

Want to see how steady volume growth, shifting margins and a richer earnings multiple all mesh into that upside case? The full narrative unpacks the precise revenue trajectory, profit profile and valuation bridge that underpin this higher fair value view.

Result: Fair Value of $58.16 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, concentrated Delaware Basin exposure and ongoing capital intensity mean any regulatory hit or lower-for-longer pricing could quickly pressure growth and cash returns.

Find out about the key risks to this Matador Resources narrative.

Build Your Own Matador Resources Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A great starting point for your Matador Resources research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Use the Simply Wall St Screener now to pinpoint fresh opportunities in minutes so you are not left watching from the sidelines when the next winners run.

• Capture momentum in early stage growth stories by targeting these 3623 penny stocks with strong financials that already back their potential with solid financial foundations.
• Position yourself for the next productivity boom by focusing on these 24 AI penny stocks that are shaping how artificial intelligence reshapes industries and long term earnings power.
• Explore income potential by zeroing in on these 10 dividend stocks with yields > 3% that can help diversify your portfolio with cash payouts that may outpace inflation.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com