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Sandridge Energy (SD)
NYSE:SD
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SandRidge Energy
(NYSE:SD)
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Rating:77Outperform
Price Target:
$19.50
▲(39.58% Upside)
Action:ReiteratedDate:03/06/26
The score is driven primarily by strong current financial performance (profitability and cash generation with minimal reported leverage) and an attractive valuation (low P/E with a dividend). Technicals add support with a clear uptrend and positive MACD. Earnings-call takeaways are favorable (operational momentum and capital returns), but the outlook carries commodity and execution risk due to limited hedging and a wide 2026 guidance range.
Positive Factors
Low Financial Leverage
Reported near-zero debt and strong liquidity (cash ~ $112M reported) provide durable financial flexibility. Low leverage reduces bankruptcy risk through downturns, supports sustained dividends and buybacks, and allows disciplined reinvestment in drilling without relying on costly external financing.
Sustained Production Growth & Execution
Consistent, multi-year production growth and a stronger oil mix increase revenue resilience and per-unit margin potential. Repeatable Cherokee well results (~2,000 Boe/day peak 30-day) demonstrate execution capability, enabling scale benefits, lower per‑BoE G&A, and more predictable multi‑year cash generation.
Owned Infrastructure & Tax Shields
Large NOLs and owned SWD/electric infrastructure materially lower long‑term cash tax and operating cost exposure. These structural assets de‑risk certain legacy wells, improve breakeven economics, and provide optionality to monetize or use infrastructure to reduce per‑well costs over multiple commodity cycles.
Negative Factors
Limited Hedging Coverage
With roughly three‑quarters of 2026 volumes unhedged, realized cash flows remain highly exposed to commodity price swings. That structural exposure can rapidly affect free cash flow, the sustainability of dividends/buybacks, and capital plans if oil or gas prices weaken over the next several quarters.
Revenue & Earnings Cyclicality
Material multi‑year swings in top-line and earnings reflect sector cyclicality and reduce predictability of margins and capital returns. This structural volatility complicates long‑range planning, increases the chance of capital allocation missteps, and weakens the stability of free cash flow across 2–6 month horizons and beyond.
Free Cash Flow Compression
Despite higher operating cash flow, free cash flow declined year‑over‑year and LOE improvement included nonrecurring items. Lower FCF conversion and one‑off benefits suggest less durable cash available for reinvestment, dividends, or buybacks if cyclical pressures reemerge or if capex ramps continue.
SandRidge Energy (SD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$635.08M
Dividend Yield3.19%
Average Volume (3M)319.56K
Price to Earnings (P/E)7.6
Beta (1Y)0.64
Revenue Growth29.52%
EPS Growth41.02%
CountryUS
Employees104
SectorEnergy
Sector Strength52
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)0.34
Shares Outstanding36,773,746
10 Day Avg. Volume329,979
30 Day Avg. Volume319,562
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)1.04
Price to Sales (P/S)3.39
P/FCF Ratio16.35
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue3.39
Enterprise Value/Gross Profit7.85
Enterprise Value/Ebitda5.45
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.69
Revenue Forecast (FY)$187.50M
SandRidge Energy Business Overview & Revenue Model
Company DescriptionSandRidge Energy, Inc. engages in the acquisition, development, and production of oil and natural gas primarily in the United States Mid-Continent. As of December 31, 2021, it had an interest in 817.0 net producing wells; and operated approximately 368,000 net leasehold acres in Oklahoma and Kansas, as well as total estimated proved reserves of 71.3 million barrels of oil equivalent. The company was incorporated in 2006 and is headquartered in Oklahoma City, Oklahoma.
How the Company Makes MoneySandRidge Energy generates revenue primarily through the sale of crude oil, natural gas, and natural gas liquids produced from its operations. The company employs a revenue model based on the extraction and sale of hydrocarbon resources, with prices influenced by global energy markets. Key revenue streams include direct sales of produced hydrocarbons to refineries and wholesalers, as well as long-term contracts that may provide price stability. Additionally, SandRidge may engage in joint ventures and partnerships to enhance operational efficiency and expand its resource base, further contributing to its earnings. The company's financial performance is significantly affected by fluctuations in commodity prices, production volumes, and operational costs.
SandRidge Energy Earnings Call Summary
Earnings Call Date:Mar 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call highlighted meaningful operational momentum and financial improvement: double-digit production growth (12% BoE, 32% oil), revenue up 25%, adjusted EBITDA and adjusted operating cash flow up materially year-over-year, strong liquidity (~$112M cash), no debt, attractive Cherokee well results (avg ~2,000 Boe/day peak 30-day) and a low breakeven (~$35 WTI). Management also emphasized disciplined capital allocation, ongoing dividends and share repurchases, and a multi-year safety record. Offsetting items include modestly lower free cash flow year-over-year, some nonrecurring benefits embedded in LOE outperformance, a wide 2026 guidance range with timing/working-interest uncertainty, and limited initial hedged coverage leaving exposure to commodity volatility (notably lower oil realizations in the quarter). On balance, positive operational execution, strong balance sheet and improving cash generation outweigh the enumerated risks and near-term uncertainties.Q4-2025 Updates
Positive Updates
Production Growth and Multiyear High
Full-year production averaged 18.5 MBoe/day, up 12% on a Boe basis and up 32% on oil versus 2024; fourth-quarter production averaged a multiyear high of 19.5 MBoe/day.
Revenue and Adjusted EBITDA Expansion
Full-year revenues of approximately $156 million, a 25% increase versus 2024; adjusted EBITDA of $101.1 million for the year versus $69 million prior year (≈+46.6%).
Strong Cash Generation and Liquidity
Adjusted operating cash flow of roughly $108 million for the year versus $77 million in 2024 (≈+40.3%); cash and restricted cash of ~$112.3 million (over $3 per common share); no debt and negative net leverage.
Capital Returns and Shareholder Distributions
Paid $4.4 million in dividends during the quarter and $4.60 per share in dividends since early 2023; Board declared a $0.12/share dividend; repurchased ~600,000 shares for $6.4 million at an average $10.72 with $68.3 million remaining authorization.
Operational Execution in Cherokee Play
Successfully completed and brought 6 Cherokee operated wells online (wells 7 and 8 also recently online); the first 6 operated wells averaged ~2,000 Boe/day peak 30-day rates with 44% oil; planning 10 operated wells in 2026 (complete 8), reflecting confidence in reservoir quality.
Low Costs and Efficiency
Full-year lease operating expenses $36.2 million (reported 14% below guidance low point, though including a $4.3M nonrecurring noncash benefit); fourth-quarter adjusted G&A ~$2.7 million or $1.53/BoE and full-year adjusted G&A ~$10.2 million or $1.50/BoE (improved per-BoE efficiency vs prior year $1.54/BoE).
Disciplined 2026 Capital Plan and Attractive Well Economics
2026 capital program guided at $76–$97 million (drilling & completions $62–$80M; other $14–$17M); gross well costs estimated $9–$11 million; reported breakeven for planned wells around $35 WTI, management expects ~20% oil production growth in 2026.
Safety and Operational Workforce
Set a new record of over four years without a recordable safety incident; lean workforce (~100 people) with outsourced non-core functions delivering low overhead and top-tier adjusted G&A.
Hedging Position to Protect Cash Flows
Hedged approximately 23% of the midpoint of 2026 guidance overall, including ~37% of natural gas production and ~27% of oil production (management has been opportunistic and layered on recent oil hedges).
Large Tax Shield and Owned Infrastructure
Approximately $1.6 billion of federal net operating loss carryforwards (NOLs) and ownership of ~1,000 miles of SWD and electric infrastructure, supporting de-risked economics and downside protection (assets de-risked to ~ $40 WTI / $2 Henry Hub for many legacy wells).
Negative Updates
Quarterly Commodity Realization Pressure on Oil and NGLs
Quarterly pre-hedge realizations declined for oil and NGLs versus the prior quarter: oil $57.56/bbl in the quarter vs $65.23/bbl in Q3; NGLs $14.92/bbl vs $15.61/bbl in Q3, exposing sensitivity to commodity price movement.
Free Cash Flow Slightly Lower Despite Higher Cash Flow
Free cash flow before acquisitions was roughly $44 million for the year versus $48 million in 2024 (≈-8.3%), indicating modest compression of free cash flow despite higher operating cash flow and a ramp in the capital program.
Reported LOE Benefit Partially Nonrecurring
Reported lease operating expense benefit included a $4.3 million nonrecurring, noncash adjustment to operating accruals; excluding that item, LOE still beat guidance but the magnitude of improvement was partly nonrecurring.
Guidance Range and Timing Uncertainty
2026 production guidance (6.4–7.7 million Boe) and CapEx guidance ($76–$97 million) have wide ranges driven by timing, crew availability, weather, and unresolved pooling/work‑interest outcomes—introducing execution and timing risk to the outlook.
Limited Hedged Coverage Leaves Commodity Exposure
Only ~23% of midpoint 2026 production hedged initially (though management is layering more hedges opportunistically), leaving the company exposed to commodity price volatility for the majority of production.
Quarterly Adjusted Net Income Essentially Flat
Adjusted net income for the quarter was $12.5 million ($0.34 diluted share) versus $12.7 million ($0.34) in the prior-year period — essentially flat despite higher revenues and EBITDA, indicating some margin or one-time item impacts.
Oil Realization and WTI Decline Versus Gas Strength
Management noted a mix where natural gas prices strengthened (helpful) while WTI was lower, creating mixed commodity realization dynamics across product types and sensitivity to regional basis for gas and NGL differentials.
Company Guidance
Management guided 2026 production of 6.4–7.7 million Boe (midpoint ~7.05M), with total capital spending of $76–$97 million (midpoint ~$86.5M) split into $62–$80M of drilling & completions and $14–$17M of capital markovers, production optimization and selective leasing; the plan calls for drilling 10 operated Cherokee wells (one‑rig) and completing 8 (with 2 carryovers), gross well costs of roughly $9–$11M per well, hedges covering ~23% of the midpoint of 2026 guidance (approximately 37% of gas and 27% of oil), an expected ~20% increase in oil volumes year‑over‑year, planned Cherokee well breakevens near $35 WTI, and continued prioritization of the dividend/share repurchase program (board declared a $0.12/share dividend and ~$68.3M of buyback authorization remains).SandRidge Energy Financial Statement Overview
Summary
Strong TTM profitability and positive free cash flow support the score, alongside very low reported leverage. Offsetting factors are pronounced cyclicality/volatility in revenue and earnings across years and a noted inconsistency in TTM equity data that reduces confidence in some balance-sheet conclusions.Income Statement
Profitability is strong in TTM (Trailing-Twelve-Months) with solid gross and operating margins and healthy net income. Revenue rebounded in TTM after a down year in 2024, but the multi-year top-line trend is volatile (large swings across 2021–2024), which is typical for the sector but still a risk. Margins remain high versus history, though results are meaningfully below the exceptional 2021–2022 peak and include a severe downturn in 2020, highlighting cyclicality.78
Positive
Balance Sheet
Financial leverage appears very low with reported total debt at (or near) zero in recent periods, which supports resiliency through commodity cycles. Returns on equity are positive and steady in 2023–TTM, but well below the outsized 2021–2022 levels. Data quality is a concern: TTM shows stockholders’ equity as 0 despite a non-zero return on equity and a non-zero debt-to-equity ratio, which limits confidence in some balance-sheet-based conclusions.66
Positive
Cash Flow
Cash generation is solid in TTM (Trailing-Twelve-Months) with positive operating cash flow and free cash flow, and free cash flow growth is strong versus the prior period. Operating cash flow exceeds net income in TTM, supporting earnings quality. The key weakness is that free cash flow is a relatively modest share of net income in TTM (lower conversion than in 2021–2024), indicating either higher reinvestment needs or working-capital/capex timing effects.73
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 156.36M | 125.29M | 148.64M | 254.26M | 168.88M |
| Gross Profit | 67.45M | 46.02M | 73.73M | 179.21M | 107.52M |
| EBITDA | 97.12M | 73.36M | 97.10M | 187.74M | 113.67M |
| Net Income | 70.20M | 62.99M | 60.86M | 242.17M | 116.74M |
Balance Sheet | |||||
| Total Assets | 644.02M | 581.51M | 574.17M | 600.50M | 352.91M |
| Cash, Cash Equivalents and Short-Term Investments | 111.00M | 98.13M | 252.41M | 255.72M | 137.26M |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 133.15M | 120.98M | 106.06M | 112.58M | 107.59M |
| Stockholders Equity | 510.87M | 460.53M | 468.11M | 487.92M | 245.32M |
Cash Flow | |||||
| Free Cash Flow | 32.45M | 47.53M | 77.94M | 119.13M | 98.62M |
| Operating Cash Flow | 100.14M | 73.93M | 115.58M | 164.70M | 110.26M |
| Investing Cash Flow | -64.01M | -154.70M | -36.16M | -45.12M | 22.97M |
| Financing Cash Flow | -23.30M | -73.67M | -82.94M | -1.64M | -21.98M |
SandRidge Energy Technical Analysis
Positive
13.97
Price Trends
15.73
Positive
14.46
Positive
12.64
Positive
Market Momentum
0.53
Positive
56.29
Neutral
65.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SD, the sentiment is Positive. The current price of 13.97 is below the 20-day moving average (MA) of 17.14, below the 50-day MA of 15.73, and above the 200-day MA of 12.64, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 56.29 is Neutral, neither overbought nor oversold. The STOCH value of 65.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SD.
SandRidge Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $635.08M | 7.56 | 14.45% | 3.19% | 29.52% | 41.02% | |
71 Outperform | $798.82M | -12.75 | 16.30% | ― | -21.67% | 251.59% | |
68 Neutral | $452.04M | 7.68 | 22.13% | 6.49% | -26.63% | -66.89% | |
66 Neutral | $553.61M | 94.57 | 5.65% | 7.20% | -23.00% | -68.20% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
61 Neutral | $240.50M | -632.04 | -10.79% | ― | -99.78% | -103.13% | |
48 Neutral | $255.95M | 12.87 | -45.51% | ― | ― | -985.28% |
* Energy Sector Average
SD
SandRidge Energy
17.42
6.74
63.11%
EGY
Vaalco Energy
5.45
1.84
50.80%
SJT
San Juan Basin Royalty
4.96
-0.17
-3.31%
GPRK
GeoPark
8.62
1.12
14.93%
GFR
Greenfire Resources
6.64
2.00
43.10%
ANNA
AleAnna
4.09
-1.99
-32.73%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.