- United States
- /
- Oil and Gas
- /
- NYSE:SM
Is SM Energy (SM) Undervalued? A Closer Look at the Recent Valuation Debate

Reviewed by Kshitija Bhandaru
See our latest analysis for SM Energy.
After a tough quarter, SM Energy's 1-year total shareholder return is down nearly 49% and its year-to-date share price return reflects continued pressure. While momentum has faded recently, a three-year total return of -44.9% shows persistent headwinds even beyond recent volatility, despite the company’s impressive gains over the past five years.
If you’re watching these shifts and want to spot other dynamic movers, now is a great moment to broaden your search and discover fast growing stocks with high insider ownership
With shares now trading at a significant discount to analyst price targets and valuation metrics indicating potential upside, investors are left wondering if SM Energy is trading below its true value, or if the market is already factoring in its future prospects.
Most Popular Narrative: 43.5% Undervalued
According to the most widely followed narrative, SM Energy’s fair value is set at $40 per share, a substantial premium to the recent close of $22.60. Bulls see room for re-rating if growth catalysts play out over the next cycle.
*Prudent balance sheet management with leverage near 1x, along with a clear commitment to opportunistic share buybacks and capital discipline, enhances the outlook for EPS growth and shareholder returns. This can lead to valuation rerating if current multiples do not fully reflect these trends.*
How are analysts arriving at such a bullish price? The narrative leans heavily on a surprising glidepath of revenue momentum, profit mix adjustments, and some eye-opening multiple expansion assumptions. Want to know which bold levers pull this fair value so far above the market? Dig into the full narrative and see exactly what drives these numbers.
Result: Fair Value of $40 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are still risks, such as logistical challenges in the Uinta Basin and the company’s narrow focus on a few shale regions. These factors could threaten this outlook.
Find out about the key risks to this SM Energy narrative.
Build Your Own SM Energy Narrative
If you see the numbers differently or want to put your own spin on the SM Energy story, you can dive into the data yourself and shape your own view in just a few minutes with Do it your way.
A great starting point for your SM Energy research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
Ready for More Smart Investing Ideas?
Don’t let opportunity slip by while others take action. Use the Simply Wall Street Screener now to uncover unique stocks you might otherwise overlook.
- Tap into stable long-term income streams and invest confidently in companies with consistent payouts through these 19 dividend stocks with yields > 3%, offering yields above 3%.
- Ride the high-growth wave with these 24 AI penny stocks, which are driving innovations across automation, data intelligence, and machine learning breakthroughs.
- Seize the potential of tomorrow’s biggest success stories by getting ahead of the crowd with these 3576 penny stocks with strong financials, showing solid fundamentals.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
About NYSE:SM
SM Energy
An independent energy company, engages in the acquisition, exploration, development, and production of oil, gas, and natural gas liquids in the state of Texas.
Undervalued average dividend payer.
Similar Companies
Market Insights
Community Narratives


