One-glance verdict
Undervalued
$86.50 our estimate vs market $48.26
Wall Street consensus: $60.96 (-29.5% lower than our fair-value estimate)
44% below our estimate, below the bear case
Fundamentals snapshot
Devon Energy Corporation
DVN · NYQ · Energy · Oil & Gas E&P
Current price
$48.26
52-week range
$31.47 - $52.71
Market cap
$53.09B
Balance sheet
Watch
7.76x Adequate
Net debt $10.94B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 14.5% last year.
- Reward Returns 11.5% on equity, ahead of 33% of its peers.
- Risk Stock trades 38.0% above its 5-year average P/E.
- Risk Net debt grew 36.4% over 3 years.
What this company does
Devon Energy Corporation
Devon Energy is a company that finds and produces oil and natural gas in the United States. Most of its money comes from selling these energy resources, which matters because the price of oil and gas directly impacts how much profit Devon makes.
How the company got here
Devon Energy was founded in 1971 by John and Larry Nichols in Oklahoma City. Initially, the company focused on onshore oil and gas exploration and production in the United States, a different approach than many of its contemporaries who looked overseas. A major turning point was the 2002 acquisition of Mitchell Energy, which significantly boosted Devon's presence in shale plays and is considered a catalyst for the U.S. shale revolution. Over the years, Devon has strategically reshaped its business, shedding international and offshore assets to concentrate on high-return, U.S.-focused shale production. This evolution has positioned the company as a leader in generating cash flow and returning value to shareholders.
What it actually does
Devon Energy is an independent energy company that explores for, develops, and produces oil, natural gas, and natural gas liquids. Think of them as being in the business of finding underground deposits of oil and gas and then bringing them to the surface to be sold. This is known as the "upstream" part of the energy industry, meaning it's the very first step in getting energy products to consumers. They operate in several key areas within the United States, focusing on shale formations where advanced techniques are used to extract these resources.
Delaware Basin
The Delaware Basin, located in southeastern New Mexico and western Texas, is Devon's most significant operating area and is often referred to as its "flagship" asset. This region is rich in oil and is a primary source for the company's high-return projects. Devon focuses on developing the oil and gas reserves within this basin, which contributes a substantial portion of the company's overall production and revenue. The success in this basin is crucial for Devon's ability to generate strong financial results.
Eagle Ford
Devon's operations in the Eagle Ford shale play, primarily in South Texas, represent a mature but still valuable part of its business. This area is known for producing both oil and natural gas liquids (NGLs), which are components of natural gas that can be turned into other products. The Eagle Ford assets are a consistent source of cash for the company, helping to fund other development projects and provide returns to investors. Its strong cash-generating capabilities make it a key contributor to Devon's financial stability.
Anadarko Basin
The Anadarko Basin, spanning western Oklahoma and the Texas Panhandle, is a long-standing core area for Devon Energy. While it may not be as oil-focused as the Delaware Basin, it provides significant scale and flexibility to the company's operations. This basin allows Devon to maintain a broad production base and offers opportunities to optimize its development plans, contributing to the overall efficiency and resilience of its business.
Williston Basin
Located in North Dakota and Montana, the Williston Basin is another important region for Devon's oil and natural gas production. The company has been actively developing its acreage here, and it represents a key part of its portfolio in the Rocky Mountains. Devon's presence in the Williston Basin is strategic, allowing it to tap into significant reserves and maintain a diversified production profile across different geological areas.
Powder River Basin
Devon also operates in the Powder River Basin, primarily in Wyoming. While this basin might be smaller in scale compared to others, it is strategically important for Devon. It serves as an area for future growth and delineation of resources, meaning the company is exploring and developing its potential for long-term production. This basin adds to Devon's geographic diversity within the U.S. and provides opportunities for future expansion.
What management is betting on now
Devon Energy's current strategy is centered on maximizing shareholder returns by focusing on generating strong free cash flow (the cash a company has left after paying for its operations and investments) and capital efficiency. Management is prioritizing disciplined investment in its core U.S. shale assets, particularly the Delaware Basin, to ensure profitable production. They are also committed to returning excess cash to shareholders through dividends (a portion of a company's profits paid out to shareholders) and share buybacks (when a company repurchases its own stock). Additionally, Devon is exploring innovative technologies, including artificial intelligence (AI), to optimize operations and reduce costs, aiming to enhance both production and financial performance.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$786.00M
FY2024 Q4
$738.00M
FY2025 Q1
$1.01B
FY2025 Q2
$589.00M
FY2025 Q3
$820.00M
FY2025 Q4
$702.00M
FY2026 Q1
$816.00M
FY2026 Q2
$2.36B
Revenue
$7.42B
Net income
$1.91B
Diluted EPS
2.03
Operating cash flow
$3.67B
Free cash flow
$2.36B
Fetching…
Sources
Revenue
$3.81B
Net income
$120.00M
Diluted EPS
0.19
Operating cash flow
$1.66B
Free cash flow
$816.00M
Fetching…
Sources
Revenue
$4.12B
Net income
$562.00M
Diluted EPS
0.90
Operating cash flow
$1.53B
Free cash flow
$702.00M
Fetching…
Sources
Revenue
$4.33B
Net income
$687.00M
Diluted EPS
1.09
Operating cash flow
$1.69B
Free cash flow
$820.00M
Fetching…
Sources
Revenue
$4.28B
Net income
$899.00M
Diluted EPS
1.41
Operating cash flow
$1.54B
Free cash flow
$589.00M
Fetching…
Sources
Revenue
$4.45B
Net income
$494.00M
Diluted EPS
0.77
Operating cash flow
$1.94B
Free cash flow
$1.01B
Fetching…
Sources
Revenue
$4.40B
Net income
$639.00M
Diluted EPS
0.98
Operating cash flow
$1.66B
Free cash flow
$738.00M
Fetching…
Sources
Revenue
$4.02B
Net income
$812.00M
Diluted EPS
1.30
Operating cash flow
$1.66B
Free cash flow
$786.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $86.50 vs current price $48.26
Wall Street consensus is the average analyst price target: $60.96 (-29.5% lower than our fair-value estimate).
Our most-likely fair value is $86.50 a share — about 79.2% above today's price of $48.26, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $10.9B. Interest coverage 7.8x.
Net debt
$10.94B
Interest coverage
7.76x
Devon Energy Corporation's profit covers its interest bill about 7.8 times over.
Watch
Worse cushion
Baseline
Better cushion
DVN
BASELINE
Devon Energy Corporation
Total debt $11.89B Interest coverage 7.76x This is the baseline the peer rows are being compared against.
Total debt $12.61B Interest coverage 18.56x +139% vs DVN Carries about 2.4x more debt cushion than DVN.
Total debt $23.29B Interest coverage 9.20x +19% vs DVN Carries about 1.2x more debt cushion than DVN.
Total debt $37.08B Interest coverage 13.70x +77% vs DVN Carries about 1.8x more debt cushion than DVN.
Total debt $8.25B Interest coverage 30.85x +298% vs DVN Carries about 4.0x more debt cushion than DVN.
Total debt $14.63B Interest coverage 3.45x -56% vs DVN Carries about 2.2x less debt cushion than DVN.
What you should know
The case for and against DVN
3 Rewards
3 Risks
Rewards
-
Revenue grew 14.5% last year.
-
Returns 11.5% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Stock trades 38.0% above its 5-year average P/E.
-
Net debt grew 36.4% over 3 years.
-
Insider ownership is only 0.8% (peer median: 4.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
10.51x
Forward P/E
8.95x
P/B
1.33x
P/S
2.83x
EV/EBITDA
7.17x
PEG ratio
2.92x
Profitability
How much profit each dollar creates
Gross margin
50.3%
Operating margin
41.1%
Net margin
17.5%
ROE
11.5%
ROA
5.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.28x
Current ratio
0.72x
Quick ratio
0.58x
Total debt
$11.89B
Total cash
$950.00M
Growth
How the business has been compounding
Revenue TTM
$19.68B
Revenue 5Y CAGR
8.9%
EPS TTM
4.59
EPS 5Y CAGR
-23.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$8.55B
Free CF TTM
$3.12B
FCF margin
15.9%
Dividend
Shareholder payout
Yield
2.6%
Payout ratio
22.7%
Last ex-div date
2026-09-15