Fact based stock research
SM Energy (NYSE:SM)

US78454L1008

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

SM Energy stock research in summary

sm-energy.com

ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), SM Energy (Oil & Gas Production, USA) shares have above-average financial characteristics compared with similar stocks. Shares of SM Energy are a good value (attractively priced) with a consolidated Value Rank of 60 (better than 60% of alternatives), show above-average growth (Growth Rank of 57), and are safely financed (Safety Rank of 71), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on SM Energy's financial characteristics. As the company SM Energy's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 60), above-average growth (Obermatt Growth Rank of 57), and indicate that the company is safely financed (Obermatt Safety Rank of 71), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of SM Energy. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	60
Growth Rank	57
Safety Rank	71
Combined Rank	73

Country	USA
Industry	Oil & Gas Production
Index	Low Emissions, Oil & Gas
Size class	Large

This stock has achievements: Top 10 Stock.

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: SM Energy

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	33	65	60
GROWTH
GROWTH	88	79	79	57
SAFETY
SAFETY	6	11	60	71
SENTIMENT
SENTIMENT	n/a	1	31	^new
360° VIEW
360° VIEW	n/a	11	71	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better SM Energy is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	26	33	65	60
GROWTH
GROWTH	88	79	79	57
SAFETY
SAFETY	6	11	60	71
COMBINED
COMBINED	18	25	90	73

Last update of combined financial performance: 25-Apr-2024. Stock analysis on combined financial performance: The higher the rank of SM Energy the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 60 (better than 60% compared with alternatives), SM Energy shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for SM Energy. Price-to-Profit (also referred to as price-earnings, P/E) is 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning SM Energy's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 63, which means that the stock price is lower as regards to invested capital than for 63% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 59% of alternatives (only 41% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 60% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 60, is a buy recommendation based on SM Energy's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	59	46	53	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	3	40	78	73
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	10	34	57	63
DIVIDEND YIELD
DIVIDEND YIELD	49	53	42	40
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	26	33	65	60

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of SM Energy; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), SM Energy shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for SM Energy. Sales Growth has a below market rank of 45, which means that, currently, professionals expect the company to grow less than 55% of its competitors. The same is valid for Capital Growth, with a rank of 23, and Profit Growth, with a rank of 45. Currently, professionals expect the company to grow its profits less than 55% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 100, which means that the stock returns have recently been above 100% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for SM Energy, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	76	8	56	45
PROFIT GROWTH
PROFIT GROWTH	18	85	77	45
CAPITAL GROWTH
CAPITAL GROWTH	n/a	60	57	23
STOCK RETURNS
STOCK RETURNS	100	93	73	100
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	88	79	79	57

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of SM Energy.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 71 (better than 71% compared with alternatives), the company SM Energy has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of SM Energy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for SM Energy. Refinancing is at 91, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 91% of its competitors. Liquidity is also good at 59, meaning the company generates more profit to service its debt than 59% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 48, which means the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 71 (better than 71% compared with alternatives), SM Energy has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and SM Energy could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with SM Energy and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	31	37	38	48
REFINANCING
REFINANCING	1	21	84	91
LIQUIDITY
LIQUIDITY	6	25	43	59
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	6	11	60	71

Last update of Safety Rank: 25-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of SM Energy and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	36	17	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	7	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	69	^new
MARKET PULSE
MARKET PULSE	n/a	10	23	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	1	31	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for SM Energy.
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