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.
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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.
Valuation is complex, but we're here to simplify it.
Discover if SM Energy might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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