SM Energy Company
SM Energy Company Fundamental Analysis
SM Energy Company (SM) shows strong financial fundamentals with a PE ratio of 3.71, profit margin of 22.23%, and ROE of 16.21%. The company generates $3.3B in annual revenue with strong year-over-year growth of 12.53%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 46.8/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SM's fundamental strength across five key dimensions:
Efficiency Score
WeakSM struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSM trades at attractive valuation levels.
Growth Score
ModerateSM shows steady but slowing expansion.
Financial Health Score
ModerateSM shows balanced financial health with some risks.
Profitability Score
ModerateSM maintains healthy but balanced margins.
Key Financial Metrics
Is SM Expensive or Cheap?
P/E Ratio
SM trades at 3.71 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, SM's PEG of -0.35 indicates potential undervaluation.
Price to Book
The market values SM Energy Company at 0.57 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 0.25 times EBITDA. This is generally considered low.
How Well Does SM Make Money?
Net Profit Margin
For every $100 in sales, SM Energy Company keeps $22.23 as profit after all expenses.
Operating Margin
Core operations generate 33.77 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.21 in profit for every $100 of shareholder equity.
ROA
SM Energy Company generates $8.00 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
SM Energy Company generates strong operating cash flow of $2.13B, reflecting robust business health.
Free Cash Flow
SM Energy Company generates weak or negative free cash flow of $-1.13B, restricting financial flexibility.
FCF Per Share
Each share generates $-9.91 in free cash annually.
FCF Yield
SM converts -42.07% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
3.71
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.35
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.82
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.49
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.56
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.14
vs 25 benchmark
How SM Stacks Against Its Sector Peers
| Metric | SM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 3.71 | 20.19 | Better (Cheaper) |
| ROE | 16.21% | 1019.00% | Weak |
| Net Margin | 22.23% | -44017.00% (disorted) | Strong |
| Debt/Equity | 0.49 | -0.65 (disorted) | Distorted |
| Current Ratio | 0.56 | 4.60 | Weak Liquidity |
| ROA | 8.00% | -11655350.00% (disorted) | Weak |
SM outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews SM Energy Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
64.84%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
503.98%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
112.26%
Industry Style: Cyclical, Value, Commodity
High Growth