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Magnolia Oil & Gas (MGY)
:MGY
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Magnolia Oil & Gas
(NYSE:MGY)
Select Model
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Rating:74Outperform
Price Target:
$27.00
▲(14.21% Upside)
Magnolia Oil & Gas scores well due to strong financial performance and positive earnings call highlights, including record production and strategic acquisitions. While technical indicators suggest caution, the company's valuation remains attractive.
Positive Factors
Strong Financial Performance
Magnolia's strong financial performance, with significant net income and EBITDAX, indicates robust profitability and operational efficiency, supporting long-term stability.
Record Production Volumes
Record production volumes highlight Magnolia's operational capabilities and market competitiveness, ensuring sustained revenue generation and growth potential.
Successful Bolt-On Acquisitions
Strategic acquisitions expand Magnolia's asset base, enhancing its development potential and long-term growth prospects in the competitive oil and gas sector.
Negative Factors
Decline in Revenue per BOE
A decline in revenue per BOE due to oil price drops could pressure margins and impact future profitability, challenging revenue growth sustainability.
Minimal Cash Taxes for 2025 and 2026
Minimal cash taxes may affect long-term financial planning and cash flow management, potentially impacting investment and growth strategies.
Negative Revenue Growth
Negative revenue growth suggests potential market challenges and could hinder Magnolia's ability to expand its market share and sustain long-term growth.
Magnolia Oil & Gas (MGY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.51B
Dividend Yield2.45%
Average Volume (3M)2.37M
Price to Earnings (P/E)12.3
Beta (1Y)0.81
Revenue Growth2.67%
EPS Growth-5.79%
CountryUS
Employees252
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.41
Shares Outstanding185,291,080
10 Day Avg. Volume2,110,417
30 Day Avg. Volume2,374,386
Financial Highlights & Ratios
PEG Ratio-2.43
Price to Book (P/B)2.28
Price to Sales (P/S)3.31
P/FCF Ratio10.10
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue3.32
Enterprise Value/Gross Profit6.62
Enterprise Value/Ebitda4.76
Forecast
1Y Price Target
$25.44Price Target Upside7.61% Upside
Rating ConsensusHold
Number of Analyst Covering12
Magnolia Oil & Gas Business Overview & Revenue Model
Company DescriptionMagnolia Oil & Gas Corporation engages in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquids reserves in the United States. Its properties are located primarily in Karnes County and the Giddings Field in South Texas principally comprising the Eagle Ford Shale and the Austin Chalk formation. As of December 31, 2021, the company's assets consisted of a total leasehold position of 4,71,263 net acres, including 23,785 net acres in Karnes and 4,47,478 net acres in the Giddings area, as well as holds 1,292 net wells with a total production capacity of 66.0 thousand barrels of oil equivalent per day. The company was incorporated in 2017 and is headquartered in Houston, Texas.
How the Company Makes MoneyMagnolia Oil & Gas generates revenue primarily through the exploration, production, and sale of crude oil, natural gas, and natural gas liquids (NGLs). The company sells its produced hydrocarbons to various customers, including large oil and gas companies, through both spot and contract pricing arrangements. Key revenue streams include the sale of crude oil, which typically constitutes the majority of its earnings, followed by natural gas and NGLs. Additionally, Magnolia benefits from hedging strategies that mitigate the impact of volatile commodity prices on its cash flow. The company may also engage in strategic partnerships and joint ventures that enhance its operational capacity and market reach, contributing to its overall revenue generation. Overall, Magnolia's business model is supported by its focus on efficient production techniques, cost management, and strategic asset acquisitions.
Magnolia Oil & Gas Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong quarter for Magnolia Oil & Gas Corporation, with significant achievements in financial performance, record production volumes, and successful acquisitions. Despite some challenges like a decline in revenue per BOE due to oil prices, the company’s outlook remains positive, supported by increased production guidance and efficient capital spending.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Total adjusted net income for the quarter was $81 million with adjusted EBITDAX of $223 million. Magnolia generated free cash flow of $107 million, returning 72% or approximately $78 million of that free cash flow to shareholders.
Record Production Volumes
The company achieved another record quarterly production rate with total volumes of 98,200 barrels of oil equivalent per day, representing year-over-year production growth of 9%.
Increased Production Guidance
Magnolia raised its full-year 2025 production growth guidance to approximately 10% from the prior range of 7% to 9% growth.
Successful Bolt-On Acquisitions
Magnolia completed bolt-on acquisitions totaling $40 million, adding approximately 18,000 net acres in Giddings and enhancing operational prospects.
Efficient Capital Spending
D&C capital was only $95 million during the second quarter, providing a reinvestment rate of just 43%, highlighting asset quality and capital program efficiency.
Negative Updates
Decline in Revenue per BOE
Total revenue per BOE declined approximately 13% year-over-year due to a decline in oil prices, partially offset by an increase in natural gas and NGL prices.
Minimal Cash Taxes for 2025 and 2026
Magnolia expects minimal cash taxes for the full year 2025 and assuming a similar price environment, expects minimal cash taxes in 2026, which could impact long-term financial planning.
Company Guidance
During the second quarter of 2025, Magnolia Oil & Gas Corporation delivered strong financial and operational results, achieving an adjusted net income of $81 million and adjusted EBITDAX of $223 million. The company demonstrated capital efficiency with drilling and completion (D&C) capital expenditures of $95 million, reflecting a reinvestment rate of only 43%. Magnolia set a new record for quarterly production at 98,200 barrels of oil equivalent per day, marking a 9% increase year-over-year, with oil production reaching 40,000 barrels per day. As a result, the company raised its full-year production growth guidance to approximately 10%, up from the previous range of 7% to 9%. Magnolia generated $107 million in free cash flow, returning 72% of this to shareholders through dividends and share repurchases. The company also completed $40 million in bolt-on acquisitions, adding approximately 18,000 net acres in the Giddings area, which expanded their development acreage by 20% to 240,000 net acres. This strategic expansion aims to enhance operational and financial performance amidst product price volatility.Magnolia Oil & Gas Financial Statement Overview
Summary
Magnolia Oil & Gas demonstrates strong profitability and cash flow generation, supported by a stable balance sheet. While revenue growth has faced headwinds, the company's margins and cash flow metrics remain robust, positioning it well in the competitive oil and gas industry.Income Statement
Magnolia Oil & Gas has shown strong profitability with a consistent gross profit margin above 50% and a net profit margin around 27% in the TTM. However, the revenue growth rate has been negative recently, indicating potential challenges in revenue expansion. Despite this, the company maintains healthy EBIT and EBITDA margins, reflecting operational efficiency.75
Positive
Balance Sheet
The company's balance sheet is stable with a low debt-to-equity ratio of 0.21 in the TTM, indicating prudent leverage management. Return on equity is solid at 25.2%, showcasing effective use of equity to generate profits. The equity ratio is healthy, suggesting a strong capital structure, though the decline in ROE from previous years could be a concern.70
Positive
Cash Flow
Cash flow performance is robust, with a significant free cash flow growth rate of 36% in the TTM. The operating cash flow to net income ratio is nearly 3, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is also healthy, supporting the company's ability to fund operations and investments.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.33B | 1.32B | 1.23B | 1.69B | 1.08B | 534.51M |
| Gross Profit | 666.17M | 672.58M | 702.37M | 1.26B | 742.76M | 128.81M |
| EBITDA | 927.01M | 922.00M | 878.67M | 1.33B | 801.53M | -1.62B |
| Net Income | 366.43M | 366.03M | 388.30M | 893.84M | 559.72M | -1.87B |
Balance Sheet | ||||||
| Total Assets | 2.86B | 2.82B | 2.76B | 2.57B | 1.75B | 1.45B |
| Cash, Cash Equivalents and Short-Term Investments | 251.76M | 260.05M | 401.12M | 675.44M | 366.98M | 192.56M |
| Total Debt | 411.63M | 392.51M | 392.84M | 390.38M | 388.09M | 391.12M |
| Total Liabilities | 862.30M | 853.51M | 873.55M | 832.39M | 701.49M | 614.00M |
| Stockholders Equity | 1.94B | 1.91B | 1.69B | 1.58B | 816.76M | 548.16M |
Cash Flow | ||||||
| Free Cash Flow | 395.36M | 431.74M | 430.90M | 831.55M | 552.05M | 87.91M |
| Operating Cash Flow | 863.71M | 920.85M | 855.79M | 1.30B | 788.48M | 310.12M |
| Investing Cash Flow | -530.24M | -655.12M | -814.90M | -518.89M | -243.44M | -269.99M |
| Financing Cash Flow | -357.39M | -406.80M | -315.21M | -469.34M | -370.61M | -30.20M |
Magnolia Oil & Gas Technical Analysis
Negative
23.64
Price Trends
24.00
Negative
23.42
Positive
23.18
Positive
Market Momentum
-0.03
Positive
45.71
Neutral
15.61
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGY, the sentiment is Negative. The current price of 23.64 is below the 20-day moving average (MA) of 24.14, below the 50-day MA of 24.00, and above the 200-day MA of 23.18, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 45.71 is Neutral, neither overbought nor oversold. The STOCH value of 15.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGY.
Magnolia Oil & Gas Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $4.36B | 7.11 | 24.36% | 2.93% | 58.35% | 210.80% | |
74 Outperform | $4.51B | 12.32 | 19.24% | 2.45% | 2.67% | -5.79% | |
72 Outperform | $2.97B | 3.66 | 19.27% | 3.09% | 28.20% | 1.63% | |
71 Outperform | $4.35B | 15.80 | 5.42% | 4.19% | -18.08% | -49.36% | |
69 Neutral | $3.30B | 5.90 | 32.89% | ― | 51.55% | 29.12% | |
66 Neutral | $4.65B | 55.62 | 3.73% | ― | 38.21% | -67.24% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
MGY
Magnolia Oil & Gas
23.64
-2.70
-10.25%
CNX
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32.88
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MUR
Murphy Oil
30.45
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SM
SM Energy
25.85
-18.80
-42.11%
VIST
Vista Oil & Gas SAB de CV
34.53
-13.38
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CRC
California Resources Corp
52.84
0.41
0.78%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.