NYSE:SM is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: May 28, 2024

Our stock screener has singled out SM ENERGY CO (NYSE:SM) as a stellar value proposition. NYSE:SM not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Exploring NYSE:SM's Valuation

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NYSE:SM was assigned a score of 7 for valuation:

Based on the Price/Earnings ratio of 8.00, the valuation of SM can be described as very cheap.
Based on the Price/Earnings ratio, SM is valued a bit cheaper than 74.53% of the companies in the same industry.
When comparing the Price/Earnings ratio of SM to the average of the S&P500 Index (28.27), we can say SM is valued rather cheaply.
With a Price/Forward Earnings ratio of 6.15, the valuation of SM can be described as very cheap.
Based on the Price/Forward Earnings ratio, SM is valued cheaper than 86.32% of the companies in the same industry.
SM is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.18, which is the current average of the S&P500 Index.
SM's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SM is cheaper than 76.42% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of SM may justify a higher PE ratio.

How do we evaluate the Profitability for NYSE:SM?

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:SM, the assigned 7 is a significant indicator of profitability:

SM has a Return On Assets of 11.73%. This is in the better half of the industry: SM outperforms 76.42% of its industry peers.
Looking at the Return On Equity, with a value of 20.29%, SM is in the better half of the industry, outperforming 67.92% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.05%, SM is in the better half of the industry, outperforming 71.70% of the companies in the same industry.
The last Return On Invested Capital (13.05%) for SM is well below the 3 year average (22.74%), which needs to be investigated, but indicates that SM had better years and this may not be a problem.
Looking at the Profit Margin, with a value of 31.80%, SM is in the better half of the industry, outperforming 79.72% of the companies in the same industry.
SM's Profit Margin has improved in the last couple of years.
SM's Operating Margin of 38.33% is fine compared to the rest of the industry. SM outperforms 74.06% of its industry peers.
In the last couple of years the Operating Margin of SM has grown nicely.
With an excellent Gross Margin value of 76.33%, SM belongs to the best of the industry, outperforming 84.43% of the companies in the same industry.
In the last couple of years the Gross Margin of SM has grown nicely.

Health Analysis for NYSE:SM

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:SM has earned a 6 out of 10:

SM has a Altman-Z score of 2.59. This is in the better half of the industry: SM outperforms 68.87% of its industry peers.
The Debt to FCF ratio of SM (4.81) is better than 61.79% of its industry peers.
SM has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
With a decent Current ratio value of 1.48, SM is doing good in the industry, outperforming 60.38% of the companies in the same industry.
Looking at the Quick ratio, with a value of 1.48, SM is in the better half of the industry, outperforming 66.04% of the companies in the same industry.

What does the Growth looks like for NYSE:SM

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:SM, the assigned 4 reflects its growth potential:

Measured over the past years, SM shows a very strong growth in Earnings Per Share. The EPS has been growing by 187.86% on average per year.
The Earnings Per Share is expected to grow by 10.07% on average over the next years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of SM

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.