SM Energy (SM) AI Stock Analysis

• Market Cap: $3.24B
• Dividend Yield: 2.97%
• Average Volume (3M): 1.90M
• Price to Earnings (P/E): 4.0
• Beta (1Y): 1.04
• Revenue Growth: 28.20%
• EPS Growth: 1.63%
• Country: US
• Employees: 663
• Sector: Energy
• Sector Strength: 67
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 1.50
• Shares Outstanding: 114,953,970
• 10 Day Avg. Volume: 1,659,778
• 30 Day Avg. Volume: 1,903,414
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.68
• Enterprise Value/Revenue: 1.75
• Enterprise Value/Gross Profit: 3.56
• Enterprise Value/Ebitda: 2.44
• 1Y Price Target: $36.88
• Price Target Upside: 37.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 72 Outperform
• Price Target: ―

SM Energy's stock score is supported by strong profitability and operational plans for growth. However, technical indicators suggest caution due to bearish trends. Valuation suggests potential undervaluation, and strategic initiatives reflect a positive outlook, though cash flow constraints and high leverage remain concerns.

Positive Factors

Financial Health

SM Energy Company reduced its debt by approximately $140 million, improving its financial position significantly.

Operational Performance

SM Energy Company's quarterly production reached record levels, driven by outstanding oil volumes, leading to financial outperformance.

Negative Factors

Capital Expenditure Concerns

Equity was a significant underperformer as investors digest heavy capital expenditure that fuels fears of capex creep this year.

Production Expectations

SM's Uinta oil production only increased 6.7% QoQ, which may dampen some of the excitement after investor expectations were higher.

SM Energy Business Overview & Revenue Model

Company Description

SM Energy Company, an independent energy company, engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids in the state of Texas. As of February 24, 2022, it had 492.0 million barrels of oil equivalent of estimated proved reserves. It also has working interests in 825 gross productive oil wells and 483 gross productive gas wells in the Midland Basin and South Texas. The company was formerly known as St. Mary Land & Exploration Company and changed its name to SM Energy Company in May 2010. SM Energy Company was founded in 1908 and is headquartered in Denver, Colorado.

How the Company Makes Money

SM Energy generates revenue primarily through the sale of oil, natural gas, and natural gas liquids (NGLs) extracted from its wells in the Permian Basin and Eagle Ford Shale. The company's revenue streams are largely dependent on the production volume and market prices of these commodities. SM Energy employs a strategy of optimizing its drilling and production techniques to enhance efficiency and increase output, thereby boosting revenue. The company may also enter into joint ventures, partnerships, or hedging arrangements to manage risks associated with commodity price volatility and enhance financial stability. Additionally, SM Energy occasionally monetizes non-core assets through sales or trades to focus on its core operations and improve its financial performance.

SM Energy Financial Statement Overview

Summary

SM Energy shows strong profitability with healthy margins and effective use of shareholder funds. However, high capital expenditures and leverage pose potential risks, which could affect future liquidity and financial stability in the cyclical oil and gas industry.

Income Statement

SM Energy shows strong profitability with a consistent gross profit margin and improving net profit margin over recent periods. Revenue growth has been volatile, reflecting the cyclical nature of the oil and gas industry, but recent figures show resilience. Margins for EBIT and EBITDA are healthy, indicating efficient operations, despite challenging industry conditions.

Balance Sheet

The company maintains a balanced debt-to-equity ratio, reflecting moderate leverage. Return on Equity (ROE) is robust, showing effective use of shareholder funds. The equity ratio is stable, indicating a solid equity base compared to total assets. However, the high debt level is a potential risk factor in volatile market conditions.

Cash Flow

Operating cash flow is strong relative to net income, indicating good cash generation from operations. However, the free cash flow has been negative due to high capital expenditures, which could impact future liquidity if not managed carefully. The free cash flow to net income ratio indicates the need for better alignment between cash flows and reported profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.11B	2.67B	2.37B	3.35B	2.60B	1.13B
Gross Profit	1.53B	1.23B	1.12B	2.12B	1.32B	-49.62M
EBITDA	2.23B	1.92B	1.70B	2.19B	1.02B	48.57M
Net Income	812.74M	770.29M	817.88M	1.11B	36.23M	-764.61M
Balance Sheet
Total Assets	8.99B	8.58B	6.38B	5.72B	5.23B	4.98B
Cash, Cash Equivalents and Short-Term Investments	101.88M	0.00	616.16M	445.00M	332.72M	10.00K
Total Debt	2.71B	2.78B	1.58B	1.57B	2.08B	2.21B
Total Liabilities	4.40B	4.34B	2.76B	2.63B	3.17B	2.96B
Stockholders Equity	4.59B	4.24B	3.62B	3.09B	2.06B	2.02B
Cash Flow
Free Cash Flow	-1.09B	-1.63B	475.05M	806.47M	481.61M	235.29M
Operating Cash Flow	2.08B	1.78B	1.57B	1.69B	1.16B	790.94M
Investing Cash Flow	-3.18B	-3.41B	-1.10B	-880.26M	-667.24M	-555.57M
Financing Cash Flow	1.08B	1.01B	-304.54M	-693.86M	-159.83M	-235.38M

SM Energy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 26.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SM, the sentiment is Negative. The current price of 26.92 is below the 20-day moving average (MA) of 27.13, above the 50-day MA of 26.90, and below the 200-day MA of 30.62, indicating a neutral trend. The MACD of 0.36 indicates Negative momentum. The RSI at 47.75 is Neutral, neither overbought nor oversold. The STOCH value of 52.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SM.

SM Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIVI	73 Outperform	$3.29B	4.49	11.31%	8.78%	0.24%	-9.19%
SM	72 Outperform	$3.24B	3.99	19.27%	2.97%	28.20%	1.63%
NOG	71 Outperform	$2.54B	4.23	27.17%	7.00%	2.98%	7.94%
CRGY	71 Outperform	$2.35B	23.27	0.70%	5.48%	32.84%	-755.17%
BSM	70 Outperform	$2.58B	10.56	24.31%	11.73%	-8.06%	-22.61%
Sector *	65 Neutral	$15.28B	7.48	3.19%	5.33%	4.10%	-60.58%
GPOR	58 Neutral	$3.08B	16.69	-6.25%	―	25.89%	-117.80%

SM Energy Corporate Events

SM Energy Announces Board Member Retirement

On March 24, 2025, Dr. Stephen R. Brand announced his retirement from the Board of Directors of SM Energy Company, effective after the company’s annual stockholders meeting on May 22, 2025. His departure is not due to any disagreements with the company, and SM Energy expressed gratitude for his contributions since 2011.

SM Energy Unveils 2025 Plan and Leadership Changes

SM Energy reported record operational and financial results for 2024, with a 23% increase in oil production and a 12% rise in net proved reserves. The company outlined a transformative 2025 plan, highlighting substantial production growth through the integration of Uinta Basin assets and a focus on capital efficiency. SM Energy also announced leadership changes, including the retirement of Jennifer Martin Samuels and the appointment of new senior executives, effective March 2025, aimed at supporting its strategic goals.