Is Magnolia Oil & Gas Corp. overvalued or undervalued?

As of 30 April 2025, the valuation grade for Magnolia Oil & Gas Corp. has moved from fair to attractive, indicating a more favorable assessment of its market position. The company appears to be undervalued, particularly when considering its P/E ratio of 13, which is lower than the peer average, as exemplified by SM Energy Co. with a P/E of 3.89. Additionally, Magnolia's EV to EBITDA ratio stands at 5.69, which is competitive within the industry, further supporting the undervaluation thesis.
In comparison to its peers, Magnolia Oil & Gas Corp. shows a strong return on capital employed (ROCE) of 24.94% and a return on equity (ROE) of 21.10%, both of which are indicative of efficient management and profitability. While the stock has underperformed the S&P 500 over the past year, its 5-year return of 291% suggests significant long-term value creation potential. Overall, Magnolia Oil & Gas Corp. is positioned as an attractive investment opportunity in the current market landscape.