Magnolia Oil & Gas Corporation Class A Common Stock (MGY)

FairStock Score: 53/100 — MIXED

Key Financials

Strengths

• Generates $226 million in annual free cash flow (4.0% yield on market cap)
• Solid return on equity of 17.0% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.21, providing financial flexibility
• Altman Z-Score of 4.5 confirms minimal bankruptcy risk and strong solvency
• Attractive 2.1% dividend yield providing steady income returns

Concerns

• Revenue declining at 2.8% year-over-year signals potential demand weakness or market share loss

AI Analysis

Magnolia Oil & Gas Corporation Class A Common Stock is a small-cap energy company valued at $5.6 billion. The business generates $1.3 billion in annual revenue with a 5.2% net margin and $226 million in free cash flow. From a quality standpoint, Magnolia shows healthy Altman Z-Score of 4.5 and adequate 17% ROE. On valuation, the stock is reasonably priced at 17.1x earnings, with trades above its Graham Number with a negative 44% margin. Growth dynamics show revenue growing at -2.8% and profit growth of -19.7%. The 2.1% dividend yield adds an income component for patient holders. Our composite FairStock Score of 53/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $226 million in annual free cash flow (4.0% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the energy space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer