Is a Beat in the Offing for Matador's (MTDR) Q1 Earnings?

Matador Resources Company MTDR is expected to beat first-quarter 2021 earnings estimates when it reports results on Apr 28, after the closing bell.

In the last reported quarter, the leading upstream company reported adjusted earnings of 27 cents per share, beating the Zacks Consensus Estimate of 12 cents, thanks to higher oil and gas production volumes as well as decreased lease operating costs. This was partially offset by weak oil price realizations.

As far as earnings surprise is concerned, the Dallas, TX-based company is on a firm footing as it beat the Zacks Consensus Estimate in the last four quarters, with the average being 171.1%. This is depicted in the graph below:

Matador Resources Company Price and EPS Surprise

Matador Resources Company Price and EPS Surprise

Matador Resources Company price-eps-surprise | Matador Resources Company Quote

Let’s see how things have shaped up prior to the upcoming earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate of 37 cents per share has seen two upward estimate revisions and one downward movement over the past 30 days. The estimated figure suggests a surge of 85% from the prior-year reported number.

However, the Zacks Consensus Estimate for revenues of $259.6 million indicates a 30.1% decline from the prior-year quarter.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Matador this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company has an Earnings ESP of +11.71%. This is because the Most Accurate Estimate for the quarter’s earnings is 41 cents per share while the Zacks Consensus Estimate is 37 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Matador currently carries a Zacks Rank #1.

Factors Driving the Better-Than-Expected Earnings

The exploration and production company’s first-quarter earnings are expected to have been boosted by higher crude production volumes. The Zacks Consensus Estimate for oil production volumes is pegged at 41,400 barrels per day (bpd), indicating a rise from the year-ago level of 40,626 bpd. Similarly, the consensus estimate for natural gas production is pegged at 188 million of cubic feet per day (MMcf/d), signaling an increase from 183 MMcf/d a year ago.

Moreover, the Zacks Consensus Estimate for average sales prices of oil (without realized derivatives) for the quarter is pegged at $52 per barrel, indicating a rise from the year-ago level of $48.81. The same for natural gas is pegged at $3.41 per thousand cubic feet, signaling a jump from the year-ago figure of $1.70.

Matador is likely to come up with an earnings beat for first-quarter 2021 on the back of a potential increase in oil and natural gas production along with commodity prices. Furthermore, the consensus estimate for its third-party midstream services revenues is pegged at $17.1 million, indicating a rise from the year-ago quarter’s $15.8 million.

Other Stocks That Warrant a Look

Here are some other firms that you may want to consider as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

EOG Resources, Inc. EOG has an Earnings ESP of +7.77% and a Zacks Rank of 1. It is scheduled to report first-quarter results on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hess Corporation HES has an Earnings ESP of +18.90% and is a Zacks #3 Ranked player. The company is scheduled to release first-quarter results before the opening bell on Apr 28.

Continental Resources, Inc. CLR has an Earnings ESP of +38.53% and a Zacks Rank #3. The firm is scheduled to release quarterly earnings on Apr 28.

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Matador Resources Company (MTDR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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