MTDR: TradeMates Model Scores 76/100 With BUY Rating

MTDR · 2026-11-13

TradeMates rates Matador Resources Company (MTDR) at an Investment Score of 76 out of 100 today, with a BUY verdict. The model rests on three observations: a 35.2% operating margin (FMP, TTM through Q3 2025), four consecutive quarters of earnings beats (Finnhub, Q4 2024 through Q3 2025), and management insider purchases in the $50 to $53 range (SEC Form 4, 2025). Add a drilling inventory extended past 15 years by the latest acquisition in the Delaware Basin.

Key Takeaways

• TradeMates assigns 76/100 and a BUY verdict; the model weights operating margins and balance-sheet discipline more heavily than raw growth rates.
• The operating margin stands at 35.2% (FMP, TTM through Q3 2025) — a level pure oil producers without midstream integration rarely reach.
• Matador beat consensus estimates in four straight quarters (Finnhub, Q4 2024 through Q3 2025), pointing to durable guidance quality.
• Management bought shares between $50 and $53 (SEC Form 4, 2025) — insider buying is treated in the model as a signal of a divergent valuation view.
• Drilling inventory extends beyond 15 years after the Ameredev acquisition (company disclosures 2024), structurally lowering reinvestment risk.

What Matador Resources Company does

Matador is an independent oil and gas producer focused on the Delaware Basin in New Mexico and Texas. The company is unusually vertically integrated: owned gathering lines, water handling and a stake in pipeline company San Mateo Midstream reduce throughput costs and stabilize margins independently of the crude price. In Q3 2025 Matador produced roughly 200,000 barrels of oil equivalent per day (10-Q Q3 2025), about half of it oil. Total debt stood at approximately $2.9bn (10-Q Q3 2025), equal to about 1.1x annualized EBITDA.

Why TradeMates is paying attention today

The core of the model thesis is the combination of margin stability and a valuation discount. Matador generates a 35.2% operating margin (FMP, TTM through Q3 2025), while the median of comparable US shale producers sits near 27% (FMP peer set, 2025). At the same time the stock trades at roughly 8.5x expected 2026 earnings per share (analyst consensus, Q4 2025) — below the company's five-year average.

Second, forecast quality: Matador beat consensus in four consecutive quarters (Finnhub, Q4 2024 through Q3 2025), by an average of 6.8%. The model reads this streak as evidence that management guidance is set conservatively.

Third, insider activity: several executives acquired shares in the $50 to $53 band in 2025 (SEC Form 4, 2025). TradeMates weights C-suite purchases more heavily than sales, since sales are often option-driven.

Opportunities from the model's perspective

• 15+ years of drilling inventory: Following the $1.9bn Ameredev acquisition (company disclosures 2024), Matador holds more than 15 years of identified drilling locations. That reduces the risk of expensive add-ons in a market where Permian acquisitions were valued at a median above $30,000 per acre in 2024 (market data 2024).
• Midstream as a margin buffer: Midstream segments recently contributed about 20% of adjusted EBITDA (10-Q Q3 2025) while tying up less than a tenth of invested capital. That structure dampens free cash flow volatility.
• Capital returns: Matador raised its quarterly dividend to $0.25 per share in 2025 (company release 2025) and continued its buyback program. The payout ratio remains below 20% of free cash flow (model calculation based on 10-Q Q3 2025).

Risks from the model's perspective

• Crude price sensitivity: A model calculation based on hedge positions shows a $10 per barrel drop in WTI reduces annualized operating cash flow by an estimated $700m to $800m (10-Q Q3 2025, hedge book). Hedging covers only part of production.
• Integration risk: The Ameredev acquisition lifted debt to roughly $2.9bn (10-Q Q3 2025). Higher rates raise refinancing costs; part of the notes matures in 2028 (10-K 2024).
• Concentration risk: More than 90% of production comes from the Delaware Basin (10-K 2024). Regional water restrictions or regulatory intervention in New Mexico hit the company without a buffer.

What investors could examine next

1. P/E trajectory: The model watches whether the 2026 P/E stays below 9x (analyst consensus Q4 2025). A move above 11x would erase the valuation premium versus the peer set.
2. Free cash flow after dividends: The key question is whether Matador keeps its payout ratio below 25% of free cash flow (10-Q Q3 2025 as the base).
3. Next earnings date: The Q4 2025 report is expected in late February 2026 (company disclosures). Production guidance for 2026 and the state of the hedge book matter most there.
4. Insider transactions: Further Form 4 filings below $55 would support the model thesis; sales without option linkage would be a counter-signal.

FAQ

Why does TradeMates rate MTDR BUY at 76/100?

The model combines three factors: an above-average 35.2% operating margin (FMP, TTM through Q3 2025), four consecutive earnings beats (Finnhub, Q4 2024 through Q3 2025) and insider purchases between $50 and $53 (SEC Form 4, 2025). Valuation at roughly 8.5x expected 2026 earnings sits below the historical average.

How exposed is Matador to the oil price?

Significantly. About half of output is oil (10-Q Q3 2025). The hedge book covers only part of production, so a $10 per barrel drop in WTI reduces annualized operating cash flow by an estimated $700m to $800m (model calculation based on 10-Q Q3 2025).

What does the Ameredev acquisition actually deliver?

It extends drilling inventory beyond 15 years (company disclosures 2024) and expands the production base. The $1.9bn price tag (company disclosures 2024) lifted debt to roughly $2.9bn (10-Q Q3 2025) — a level the model considers manageable but no longer comfortable.

How sustainable is the dividend?

The $0.25 per share quarterly dividend (company release 2025) equals a payout ratio below 20% of free cash flow (model calculation based on 10-Q Q3 2025). The model sees room for increases as long as WTI stays above $65 per barrel.

Which number would flip the model verdict?

A sustained drop in operating margin below 28% (FMP, TTM basis) or net leverage above 1.5x EBITDA (10-Q Q3 2025 as the base) would push the score below the BUY threshold of 70 points.

This is a model analysis, not investment advice. Investments carry risk.