One-glance verdict
Within fair range
$37.39 our estimate vs market $37.00
Wall Street consensus: $44.29 (18.5% higher than our fair-value estimate)
1% below our estimate
Fundamentals snapshot
SM Energy Company
SM · NYQ · Energy · Oil & Gas E&P
Current price
$37.00
52-week range
$17.45 - $41.56
Market cap
$8.80B
Balance sheet
Stretched
4.75x Stretched
Net debt $6.81B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 74.2% last year.
- Reward Free cash flow was positive in 3/10 years.
- Risk Net debt grew 108.2% over 3 years.
- Risk Stock trades 40.6% above its 5-year average P/E.
What this company does
SM Energy Company
SM Energy Company sells oil and natural gas, which it finds and extracts from land in the United States. The money the company makes primarily comes from selling these energy resources. This matters because the price of oil and gas can change a lot, which directly impacts how much money SM Energy earns.
How the company got here
SM Energy Company has a long history, tracing its roots back to 1908 when it was founded as the St. Mary Parish Land Company. It became a publicly traded company in 1992 and officially changed its name to SM Energy Company in 2010. Over the years, the company has strategically focused on acquiring, exploring, developing, and producing oil and natural gas. It has undergone various acquisitions and divestitures to refine its asset portfolio, aiming to concentrate on high-quality, lower-cost producing areas within the United States.
What it actually does
SM Energy is an independent energy company that explores for and produces oil, natural gas, and natural gas liquids (NGLs). These are all types of fossil fuels that are extracted from the earth. Oil is primarily used to create gasoline and other fuels, as well as plastics. Natural gas is commonly used for heating and electricity generation. Natural gas liquids are a group of hydrocarbon products derived from natural gas that can be used in various industrial processes and as fuel.
Permian Basin
This segment focuses on the exploration and production of oil and natural gas in the Permian Basin, which spans West Texas and New Mexico. This region is known for its rich reserves and is a significant contributor to SM Energy's overall production. The company actively develops its acreage here, aiming to maximize the recovery of valuable hydrocarbons.
South Texas (Eagle Ford & Maverick Basins)
SM Energy's operations in South Texas are concentrated in areas like the Eagle Ford and Maverick Basins. This region is a key part of the company's asset base, contributing a substantial portion of its reserves and production. The company works to efficiently extract oil and natural gas from these formations.
Uinta Basin
Located in northeast Utah, the Uinta Basin represents another important operational area for SM Energy. While it may be a smaller portion of the company's overall holdings compared to other basins, it is still a focus for development and production. The company has integrated acquisitions in this area, aiming to enhance its presence and output.
DJ Basin
SM Energy also has significant operations in the Denver-Julesburg (DJ) Basin in Colorado. This area is characterized by its oil and gas producing assets, and the company employs advanced technology to optimize its exploration and production activities here. The DJ Basin is a key component of SM Energy's strategy to operate top-tier assets.
What management is betting on now
SM Energy's current strategy centers on operational excellence and financial strength, with a strong emphasis on debt reduction before resuming share buybacks. The company is focused on maximizing free cash flow (cash generated after operating expenses and capital expenditures) by optimizing its high-quality asset portfolio and improving capital efficiency. They are also integrating recent acquisitions, like the one in the Uinta Basin, which has exceeded expectations. Management prioritizes safety, technological innovation, and responsible resource stewardship in all its operations.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$2.50B
Net income
$1.07B
Diluted EPS
4.46
Operating cash flow
$1.10B
Free cash flow
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Sources
Revenue
$1.48B
Net income
$-335.00M
Diluted EPS
-1.68
Operating cash flow
$640.00M
Free cash flow
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Sources
Revenue
$704.92M
Net income
$108.98M
Diluted EPS
0.94
Operating cash flow
$451.91M
Free cash flow
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Sources
Revenue
$811.59M
Net income
$155.09M
Diluted EPS
1.35
Operating cash flow
$504.96M
Free cash flow
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Sources
Revenue
$792.94M
Net income
$201.66M
Diluted EPS
1.76
Operating cash flow
$571.14M
Free cash flow
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Sources
Revenue
$844.54M
Net income
$182.27M
Diluted EPS
1.59
Operating cash flow
$482.99M
Free cash flow
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Sources
Revenue
$852.22M
Net income
$188.28M
Diluted EPS
1.63
Operating cash flow
$577.87M
Free cash flow
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Sources
Revenue
$643.61M
Net income
$240.52M
Diluted EPS
2.09
Operating cash flow
$452.26M
Free cash flow
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Is it cheap or expensive?
Fair value $37.39 vs current price $37.00
Wall Street consensus is the average analyst price target: $44.29 (18.5% higher than our fair-value estimate).
Our most-likely fair value is $37.39 a share — about 1.0% away from today's price of $37.00, so the stock currently looks fairly priced.
Is it drowning in debt?
Stretched
Net debt $6.8B. Interest coverage 4.8x.
Net debt
$6.81B
Interest coverage
4.75x
SM Energy Company is healthier than 0 of 1 peers on balance-sheet leverage.
Stretched
Worse cushion
Baseline
Better cushion
SM
BASELINE
SM Energy Company
Total debt $7.43B Interest coverage 4.75x This is the baseline the peer rows are being compared against.
What you should know
The case for and against SM
3 Rewards
2 Risks
Rewards
-
Revenue grew 74.2% last year.
-
Free cash flow was positive in 3/10 years.
-
Dividend yield is 2.4% with 34-year payout history.
Risks
-
Net debt grew 108.2% over 3 years.
-
Stock trades 40.6% above its 5-year average P/E.
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)
6.56x
Forward P/E
4.52x
P/B
1.12x
P/S
1.77x
EV/EBITDA
4.87x
PEG ratio
0.62x
Profitability
How much profit each dollar creates
Gross margin
86.5%
Operating margin
60.3%
Net margin
20.2%
ROE
16.1%
ROA
6.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.95x
Current ratio
0.61x
Quick ratio
0.52x
Total debt
$7.43B
Total cash
$620.00M
Growth
How the business has been compounding
Revenue TTM
$5.50B
Revenue 5Y CAGR
4.7%
EPS TTM
5.64
EPS 5Y CAGR
-14.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.70B
Free CF TTM
$539.00M
FCF margin
9.8%
Dividend
Shareholder payout
Yield
2.4%
Payout ratio
18.4%
Last ex-div date
2026-09-04