Matador Resources is an independent energy company engaged in the exploration, development, production and acquisition of oil and natural gas resources in the United States, with a focus on oil and natural gas shale and other unconventional plays. The company's operations are focused on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin in Southeast New Mexico and West Texas. The company also operates in the Eagle Ford shale play in South Texas and the Haynesville shale and Cotton Valley plays in Northwest Louisiana. Also, the company conducts midstream operations, through its midstream joint venture, San Mateo Midstream, LLC together with San Mateo Midstream II, LLC.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
F5 Networks, Inc. (FFIV) currently trades above historical and corporate averages relative to Uniform earnings, with a 28.4x Uniform P/E (Fwd. V/E'). At these levels, markets are pricing in expectations for Uniform ROA to gradually recover back to 2019 levels of 28%, accompanied by 5% Uniform asset growth. Meanwhile, analyst expectations for 21% Uniform ROA and 4% Uniform asset growth imply a stock price approaching $157, representing 23% equity downside for the firm. Moreover, the firm's most recent earnings call suggests management may have concerns about their growth, software business, ...
Floor & Decor Holdings (FND:USA) currently trades above corporate averages and at a historical high relative to Uniform earnings, with a 41.0x Uniform P/E (Fwd. V/E'). At these levels, markets are pricing in expectations for Uniform ROA to expand to historical highs, accompanied by 12% Uniform asset growth. However, if sustainable in perpetuity, analyst expectations for 13% Uniform ROA and 37% Uniform asset growth imply a stock price of about $160, representing 25% equity upside for the firm. That said, the firm's most recent earnings call suggests management may have concerns about growth,...
Credit markets are materially overstating REGI's credit risk with a YTW of 4.988%, relative to an Intrinsic YTW of 2.618% and an Intrinsic CDS of 123bps. Meanwhile, Moody's is grossly overstating the firm's fundamental credit risk, with its highly speculative B1 credit rating nine notches lower than Valens' IG3+ (A1) credit rating. Incentives Dictate Behavior™ analysis highlights mixed signals for creditors. Specifically, REGI's compensation framework should focus management on margin expansion and revenue growth, which could lead to Uniform ROA expansion and increased cash flow generation. A...
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