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Relative valuation derived from Energy sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
18.6%
Sector: 6.7%
Dividend Analysis audit
INCOME
2.43%
Trailing Yield
$2.43
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
39%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Magnolia Oil & Gas Corp (MGY) receives a "Hold" rating with a composite score of 50.2/100, ranked #206 out of 4446 stocks. Key factor scores: Quality 50/100, Value 66/100, Momentum 57/100. This is quantitative analysis only — not investment advice.
Magnolia Oil & Gas Corp (MGY) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Magnolia Oil & Gas Corp Do?
Magnolia 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. Magnolia Oil & Gas Corp (MGY) is classified as a mid-cap stock in the Energy sector, specifically within the Petroleum And Natural Gas industry. The company is led by CEO Christopher G. Stavros and employs approximately 210 people. With a market capitalization of $5.6B, MGY is one of the notable companies in the Energy sector.
Magnolia Oil & Gas Corp (MGY) Stock Rating — Hold (April 2026)
As of April 2026, Magnolia Oil & Gas Corp receives a Hold rating with a composite score of 50.2/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.MGY ranks #206 out of 4,446 stocks in our coverage universe. Within the Energy sector, Magnolia Oil & Gas Corp ranks #34 of 128 stocks, placing it in the upper half of its Energy peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
MGY Stock Price and 52-Week Range
Magnolia Oil & Gas Corp (MGY) currently trades at $29.90. The stock gained $0.24 (0.8%) in the most recent trading session. The 52-week high for MGY is $30.44, which means the stock is currently trading -1.8% from its annual peak. The 52-week low is $19.09, putting the stock 56.6% above its annual trough. Recent trading volume was 1.9M shares, reflecting moderate market activity.
Is MGY Overvalued or Undervalued? — Valuation Analysis
Magnolia Oil & Gas Corp (MGY) carries a value factor score of 66/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 15.94x, compared to the Energy sector average of 19.63x — a discount of 19%. The price-to-book ratio stands at 2.97x, versus the sector average of 1.64x. The price-to-sales ratio is 4.47x, compared to 0.47x for the average Energy stock. On an enterprise value basis, MGY trades at 13.33x EV/EBITDA, versus 3.50x for the sector.
Overall, MGY's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
Magnolia Oil & Gas Corp Profitability — ROE, Margins, and Quality Score
Magnolia Oil & Gas Corp (MGY) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 18.6%, compared to the Energy sector average of 6.7%, which is within a healthy range. Return on assets (ROA) comes in at 12.8% versus the sector average of 3.7%.
On a margin basis, Magnolia Oil & Gas Corp reports gross margins of 0.0%, compared to 52.7% for the sector. The operating margin is 35.6% (sector: 10.7%). Net profit margin stands at 27.9%, versus 6.4% for the average Energy stock. Revenue growth is running at -3.5% on a trailing basis, compared to -1.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
MGY Debt, Balance Sheet, and Financial Health
Magnolia Oil & Gas Corp has a debt-to-equity ratio of 20.0%, compared to the Energy sector average of 55.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 1.54x, suggesting adequate working capital coverage. Total debt on the balance sheet is $393M. Cash and equivalents stand at $280M.
MGY has a beta of 1.02, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for Magnolia Oil & Gas Corp is 66/100, reflecting average volatility within the normal range for its sector.
Magnolia Oil & Gas Corp Revenue and Earnings History — Quarterly Trend
In TTM 2026, Magnolia Oil & Gas Corp reported revenue of $1.33B. Net income for the quarter was $372M. Gross margin was 0.0%. Operating income came in at $474M.
In FY 2025, Magnolia Oil & Gas Corp reported revenue of $1.31B. Net income for the quarter was $337M. Revenue grew -0.3% year-over-year compared to FY 2024. Operating income came in at $439M.
In Q3 2025, Magnolia Oil & Gas Corp reported revenue of $325M. Net income for the quarter was $78M. Revenue grew -2.5% year-over-year compared to Q3 2024. Operating income came in at $101M.
In Q2 2025, Magnolia Oil & Gas Corp reported revenue of $319M. Net income for the quarter was $81M. Revenue grew -5.3% year-over-year compared to Q2 2024. Operating income came in at $108M.
Over the past 8 quarters, Magnolia Oil & Gas Corp has demonstrated a growth trajectory, with revenue expanding from $337M to $1.33B. Investors analyzing MGY stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
MGY Dividend Yield and Income Analysis
Magnolia Oil & Gas Corp (MGY) currently pays a dividend yield of 2.4%. At this yield, a $10,000 investment in MGY stock would generate approximately $$243.00 in annual dividend income. This compares to the Energy sector average dividend yield of 1.9%, meaning MGY offers above-average income for its sector. With a net margin of 27.9%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
MGY Momentum and Technical Analysis Profile
Magnolia Oil & Gas Corp (MGY) has a momentum factor score of 57/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 35/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 10/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
MGY vs Competitors — Energy Sector Ranking and Peer Comparison
Comparing MGY against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full MGY vs S&P 500 (SPY) comparison to assess how Magnolia Oil & Gas Corp stacks up against the broader market across all factor dimensions.
MGY Next Earnings Date
No upcoming earnings date has been announced for Magnolia Oil & Gas Corp (MGY) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy MGY? — Investment Thesis Summary
Magnolia Oil & Gas Corp presents a balanced picture with arguments on both sides. The value score of 66/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 66/100) reduces downside risk.
In summary, Magnolia Oil & Gas Corp (MGY) earns a Hold rating with a composite score of 50.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on MGY stock.
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Institutional Research Dossier
Magnolia Oil & Gas Corp (MGY) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Magnolia Oil & Gas is rated a Hold, reflecting a balanced view of its operational strengths and financial performance against the backdrop of inherent industry volatility and a somewhat constrained free cash flow profile. While the company exhibits strong profitability metrics relative to its sector, its recent revenue decline and modest free cash flow generation raise concerns about its growth trajectory and capital allocation efficiency. The Hold rating acknowledges Magnolia's solid operational execution and attractive valuation multiples, but also factors in the uncertainties surrounding future commodity prices and the company's ability to sustain its profitability amidst fluctuating market conditions.
The most critical takeaway is that Magnolia's valuation appears attractive on the surface, but investors should closely monitor its ability to translate strong operating margins into robust free cash flow and revenue growth. The company's capital allocation decisions, particularly regarding debt management and potential acquisitions, will be crucial in determining its long-term success and shareholder value creation. A sustained improvement in free cash flow and a return to revenue growth are necessary for a potential upgrade in the rating.
Business Strategy & Overview
Magnolia Oil & Gas Corporation operates as an independent exploration and production (E&P) company focused on developing oil, natural gas, and natural gas liquids reserves in the United States, primarily within the Eagle Ford Shale and Austin Chalk formations in South Texas. The company's strategy centers on disciplined capital allocation, operational efficiency, and maximizing returns from its existing asset base. Magnolia aims to maintain a low-cost structure and generate free cash flow, which is then used for debt reduction, share repurchases, and strategic acquisitions.
The company's operational focus is on optimizing well performance, improving drilling techniques, and enhancing production efficiencies. Magnolia employs a combination of organic drilling and acquisitions to expand its leasehold position and increase its production capacity. The company's management team has a proven track record of successfully developing and operating unconventional oil and gas assets, which provides a competitive advantage in navigating the complexities of the E&P industry.
Magnolia's strategic positioning within the Eagle Ford Shale and Austin Chalk formations provides access to prolific hydrocarbon resources and established infrastructure. The company's acreage is strategically located in areas with favorable geology and access to transportation and processing facilities. This allows Magnolia to efficiently produce and market its oil and gas production.
The company's business model is predicated on maintaining a strong balance sheet and generating sustainable free cash flow. Magnolia prioritizes debt reduction and shareholder returns, which differentiates it from some of its peers in the E&P industry. The company's management team has demonstrated a commitment to disciplined capital allocation and a focus on maximizing shareholder value.
The broader industry context for Magnolia is characterized by fluctuating commodity prices, increasing regulatory scrutiny, and growing environmental concerns. The company's ability to navigate these challenges and maintain its competitive position will be critical to its long-term success. Magnolia's focus on operational efficiency, cost control, and responsible environmental practices will be key differentiators in a rapidly evolving industry landscape.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-3.5%
Sector: -1.2%
+199% VS SCTR
Economic Moat Analysis
Magnolia Oil & Gas possesses a narrow economic moat, primarily derived from its cost advantages in the Eagle Ford Shale and Austin Chalk formations. The company's operational expertise, strategic acreage position, and efficient drilling techniques contribute to its ability to produce oil and gas at a lower cost than some of its competitors. This cost advantage allows Magnolia to generate higher returns on its investments and maintain profitability even during periods of lower commodity prices.
The company's strategic acreage position in the Eagle Ford Shale and Austin Chalk formations provides access to prolific hydrocarbon resources and established infrastructure. This allows Magnolia to efficiently produce and market its oil and gas production, further enhancing its cost advantage. The company's management team has a proven track record of successfully developing and operating unconventional oil and gas assets, which provides a competitive advantage in navigating the complexities of the E&P industry.
However, the company's moat is considered narrow due to the cyclical nature of the oil and gas industry and the potential for technological advancements to erode its cost advantages. The prices of oil and gas are subject to significant fluctuations based on global supply and demand dynamics, which can impact Magnolia's profitability and cash flow generation. Additionally, advancements in drilling and production technologies could allow competitors to reduce their costs and narrow the gap with Magnolia.
Furthermore, the company's reliance on a specific geographic region (South Texas) exposes it to concentration risk. Any adverse events or regulatory changes affecting the Eagle Ford Shale and Austin Chalk formations could significantly impact Magnolia's operations and financial performance. While the company has a strong track record of operational execution, its narrow moat limits its ability to consistently outperform its peers over the long term.
The absence of significant intangible assets, such as proprietary technology or exclusive licenses, further contributes to the narrowness of Magnolia's moat. While the company has developed expertise in drilling and production techniques, these are not necessarily unique or difficult to replicate. As a result, Magnolia's competitive advantage is primarily based on its operational efficiency and cost control, which are subject to change over time.
Financial Health & Profitability
Magnolia Oil & Gas exhibits a mixed financial profile. While the company demonstrates strong profitability metrics, its revenue growth has been negative, and its free cash flow generation has been inconsistent. The company's balance sheet is relatively healthy, with a manageable debt-to-equity ratio and a solid current ratio.
The company's revenue has declined by 3.5% on a TTM basis, which is a concern. While the sector average also shows a decline, Magnolia's revenue contraction is more pronounced. This suggests that the company may be facing challenges in maintaining its production levels or realizing favorable pricing for its oil and gas production. The quarterly revenue data reveals fluctuations, indicating volatility in the company's top-line performance.
However, Magnolia's profitability metrics are impressive. The company's operating margin of 35.6% and net margin of 27.9% significantly exceed the sector averages of 10.6% and 6.3%, respectively. This indicates that Magnolia is highly efficient in converting its revenue into profits. The company's return on equity (ROE) of 18.6% is also substantially higher than the sector average of 6.9%, demonstrating its ability to generate strong returns for its shareholders.
The company's free cash flow (FCF) generation is a point of concern. The TTM FCF of $22.15 million is relatively low compared to its market capitalization of $5.56 billion. While the company generated a substantial FCF of $340.32 million in FY2024, the TTM figure suggests a significant decline in its cash flow generation capacity. This could be due to increased capital expenditures, lower commodity prices, or other factors affecting its profitability.
Magnolia's balance sheet appears to be in good shape. The company has $280.49 million in cash and $393.25 million in total debt, resulting in a debt-to-equity ratio of 20.00, which is significantly lower than the sector average of 55.00. The company's current ratio of 1.54 indicates that it has sufficient liquid assets to cover its short-term liabilities. Overall, Magnolia's financial health is characterized by strong profitability, a healthy balance sheet, but concerns around revenue growth and free cash flow generation.
Valuation Assessment
Magnolia Oil & Gas appears attractively valued based on several key metrics, but a deeper analysis reveals potential caveats. The company's P/E ratio of 15.0x is lower than the sector average of 19.5x, suggesting that the stock is undervalued relative to its earnings. Similarly, its EV/EBITDA multiple of 3.4x is slightly below the sector average of 3.5x, further supporting the notion that Magnolia is trading at a discount.
However, these valuation metrics should be considered in the context of the company's recent revenue decline and inconsistent free cash flow generation. While Magnolia's profitability metrics are strong, its lack of revenue growth raises concerns about its ability to sustain its earnings over the long term. Additionally, the company's low free cash flow yield suggests that it may not be generating sufficient cash to justify its current market capitalization.
A more comprehensive valuation analysis would involve considering the company's future growth prospects, its capital allocation strategy, and the prevailing commodity price environment. If Magnolia can successfully return to revenue growth and improve its free cash flow generation, its current valuation could be considered a bargain. However, if the company continues to struggle with revenue growth and cash flow, its valuation may be justified or even overvalued.
The company's valuation should also be compared to its historical trading multiples. If Magnolia has historically traded at a premium to its current valuation, it could indicate that the stock is currently undervalued. However, if the company's current valuation is in line with its historical averages, it may suggest that the stock is fairly valued.
Overall, Magnolia's valuation appears attractive on the surface, but investors should carefully consider its revenue growth, free cash flow generation, and future growth prospects before making an investment decision. The company's ability to improve its financial performance will be crucial in determining whether its current valuation is justified.
Risk & Uncertainty
Magnolia Oil & Gas faces several specific risks that could negatively impact its business and financial performance. The most significant risk is its exposure to commodity price volatility. The prices of oil, natural gas, and natural gas liquids are subject to significant fluctuations based on global supply and demand dynamics, geopolitical events, and other factors. A sustained decline in commodity prices could significantly reduce Magnolia's revenue, profitability, and cash flow generation.
Another risk is the company's concentration in the Eagle Ford Shale and Austin Chalk formations. Any adverse events or regulatory changes affecting these regions could significantly impact Magnolia's operations and financial performance. These events could include natural disasters, environmental regulations, or changes in drilling permits.
Competition from other E&P companies is also a risk. The oil and gas industry is highly competitive, and Magnolia faces competition from both large and small companies. These competitors may have greater financial resources, more extensive acreage positions, or more advanced technologies. Increased competition could put pressure on Magnolia's prices, production levels, and profitability.
Regulatory risks are also a concern. The oil and gas industry is subject to extensive regulations at the federal, state, and local levels. These regulations cover a wide range of issues, including environmental protection, drilling permits, and transportation safety. Changes in these regulations could increase Magnolia's operating costs and reduce its profitability.
Bulls Say / Bears Say
The Bull Case
BULL VIEWMagnolia's disciplined capital allocation and focus on shareholder returns make it an attractive investment in a volatile energy market.
BULL VIEWThe company's strong operating margins and low debt levels provide a buffer against commodity price fluctuations and allow for strategic acquisitions.
BULL VIEWMagnolia's strategic acreage position in the Eagle Ford Shale and Austin Chalk formations provides access to prolific hydrocarbon resources and established infrastructure.
The Bear Case
BEAR VIEWMagnolia's declining revenue and inconsistent free cash flow generation raise concerns about its long-term growth prospects.
BEAR VIEWThe company's reliance on a specific geographic region (South Texas) exposes it to concentration risk and potential regulatory challenges.
BEAR VIEWCommodity price volatility and increased competition could significantly impact Magnolia's profitability and cash flow generation.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score MGY and 4,400+ other equities.
Magnolia Oil & Gas Corp exhibits a 299% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
12.8%
Sector: 3.7%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 52.7%
Operating Margin
Core business profitability
35.6%
Sector: 10.7%
Net Margin
Bottom-line profitability
27.9%
Sector: 6.4%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield1.89%
Yield Delta+29%
Income Projection audit
A $10,000 investment would generate approximately $243 annually in dividends at the current trailing rate.
