Devon Energy (DVN) AI Stock Analysis

• Market Cap: $20.23B
• Dividend Yield: 3.98%
• Average Volume (3M): 10.12M
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.68
• Revenue Growth: 3.00%
• EPS Growth: -21.63%
• Country: US
• Employees: 2,300
• Sector: Energy
• Sector Strength: 46
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 4.57
• Shares Outstanding: 643,329,200
• 10 Day Avg. Volume: 7,410,693
• 30 Day Avg. Volume: 10,123,061
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.48
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.88
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $42.64
• Price Target Upside: 35.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22

Devon Energy earns a strong overall score due to robust financial performance and growth potential highlighted in the earnings call. The stock's attractive valuation further supports its appeal. However, technical analysis suggests potential short-term volatility, and rising leverage on the balance sheet requires careful monitoring.

Positive Factors

Optimization Plan

DVN's $1bn optimization plan surpasses expectations with impressive scale and speed.

Shareholder Returns

Devon Energy remains committed to returning up to 70% of free cash flow, targeting $200-300 million in quarterly buybacks, indicating a strong focus on shareholder returns.

Negative Factors

Operating Expenses

Devon Energy's cash operating expenses are expected to rise approximately 5% quarter-over-quarter, reflecting a more normalized operating environment.

Production Decline

Following the dissolution of the joint venture with BP, Devon Energy's production is expected to decline in the second quarter, although this is already accounted for in their guidance.

Devon Energy Business Overview & Revenue Model

Company Description

Devon Energy Corporation (DVN) is a leading independent energy company engaged primarily in the exploration, development, and production of oil, natural gas, and natural gas liquids. Headquartered in Oklahoma City, Oklahoma, Devon operates in several key oil and gas producing regions in the United States. The company's core assets are located in the Delaware Basin, Eagle Ford, Anadarko Basin, and the Powder River Basin, where it employs advanced drilling and production techniques to optimize resource extraction. Devon Energy is committed to operational excellence and sustainability, with a focus on delivering value to its shareholders through efficient resource management and strategic growth initiatives.

How the Company Makes Money

Devon Energy generates revenue primarily through the sale of oil, natural gas, and natural gas liquids that it extracts from its operational basins. The company's revenue model is heavily influenced by commodity prices, production volume, and operational efficiency. Key revenue streams include the sale of crude oil, which constitutes the largest portion of its revenues, and the sale of natural gas and natural gas liquids. Devon also engages in hedging activities to mitigate the impact of price volatility in the energy markets. Strategic partnerships and joint ventures in its operational regions further enhance its capacity to optimize production and expand its asset base, thereby contributing to its earnings. Additionally, the company focuses on cost management and technological innovation to improve its margins and drive profitability.

Devon Energy Financial Statement Overview

Summary

Devon Energy demonstrates strong revenue growth and operational efficiency with solid EBIT and EBITDA margins. However, a declining net profit margin and increasing leverage from a moderate debt-to-equity ratio present cautionary notes. The company maintains effective cash flow management, supporting investment and operations, but must focus on profitability margins and debt levels for long-term stability.

Income Statement

Devon Energy has demonstrated strong revenue growth over the years, with a notable increase from 2023 to 2024. The company boasts a high gross profit margin, indicative of good production efficiency. However, the net profit margin has seen a decline, suggesting rising costs or other financial pressures. EBIT and EBITDA margins are solid, reflecting operational efficiency despite fluctuating net income.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, which has increased slightly, potentially indicating growing leverage risks. The return on equity is positive, suggesting effective utilization of equity capital. However, the equity ratio indicates a balanced but not overly conservative capital structure, with room for improvement in equity financing.

Cash Flow

Devon Energy has shown consistent free cash flow generation, with a positive growth rate over the recent period. The operating cash flow to net income ratio is strong, indicating effective cash conversion from profits. While the free cash flow to net income ratio is healthy, indicating good cash management, ongoing capital expenditures may affect future cash flows.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.94B	15.14B	19.17B	12.21B	4.83B
	Gross Profit
15.94B	5.20B	8.37B	3.68B	392.00M
	EBIT
10.70B	2.34B	8.07B	3.31B	-90.00M
	EBITDA
7.37B	7.57B	10.38B	5.42B	-1.36B
	Net Income Common Stockholders
2.89B	3.75B	6.01B	2.81B	-2.54B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
846.00M	875.00M	1.45B	2.27B	2.24B
	Total Assets
30.49B	24.49B	23.72B	21.02B	9.91B
	Total Debt
9.20B	6.48B	6.70B	6.73B	4.54B
	Net Debt
8.36B	5.58B	5.24B	4.46B	2.31B
	Total Liabilities
15.79B	12.27B	12.43B	11.63B	6.89B
	Stockholders Equity
14.50B	12.06B	11.17B	9.26B	2.88B
Cash Flow		Free Cash Flow
2.96B	2.60B	3.40B	2.89B	193.00M
	Operating Cash Flow
6.60B	6.54B	8.53B	4.90B	1.35B
	Investing Cash Flow
-7.33B	-3.94B	-5.12B	-1.57B	-646.00M
	Financing Cash Flow
706.00M	-3.18B	-4.21B	-3.29B	-306.00M

Devon Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DVN, the sentiment is Positive. The current price of 31.44 is above the 20-day moving average (MA) of 29.95, below the 50-day MA of 33.32, and below the 200-day MA of 37.27, indicating a neutral trend. The MACD of -0.59 indicates Negative momentum. The RSI at 49.14 is Neutral, neither overbought nor oversold. The STOCH value of 56.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DVN.

Devon Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CTRA	81 Outperform	$19.61B	17.07	8.56%	3.31%	-3.92%	-29.44%
EC	78 Outperform	$16.69B	4.57	18.70%	12.16%	-1.24%	-16.75%
DVN	76 Outperform	$20.23B	6.89	21.77%	3.98%	3.00%	-21.63%
WDS	73 Outperform	$25.28B	7.05	10.23%	8.88%	-0.93%	115.30%
HAL	70 Outperform	$17.71B	8.63	20.99%	3.30%	-2.54%	-17.53%
VLO	67 Neutral	$37.25B	41.93	3.73%	3.65%	-8.44%	-85.95%
Sector *	56 Neutral	$7.00B	3.42	-4.37%	5.89%	-0.12%	-48.35%

Devon Energy Corporate Events

Devon Energy Board Member John Krenicki Jr. to Retire

On March 4, 2025, John Krenicki Jr. announced his decision to retire from the Board of Directors of Devon Energy Corporation at the end of his current term and will not seek re-election at the 2025 annual meeting of stockholders. His decision to retire is not due to any disagreement with the company.