Don't overlook NYSE:SM—it's a hidden gem with strong fundamentals and an attractive price tag.

Last update: Jun 19, 2024

Our stock screening tool has pinpointed SM ENERGY CO (NYSE:SM) as an undervalued stock. NYSE:SM maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Assessing Valuation Metrics for NYSE:SM

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:

SM is valuated cheaply with a Price/Earnings ratio of 7.91.
73.93% of the companies in the same industry are more expensive than SM, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.73, SM is valued rather cheaply.
SM is valuated cheaply with a Price/Forward Earnings ratio of 6.13.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SM indicates a rather cheap valuation: SM is cheaper than 83.41% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of SM to the average of the S&P500 Index (20.21), we can say SM is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SM indicates a somewhat cheap valuation: SM is cheaper than 74.88% of the companies listed in the same industry.
SM's 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.

What does the Profitability looks like for NYSE:SM

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:SM has earned a 7 out of 10:

The Return On Assets of SM (11.73%) is better than 76.78% of its industry peers.
With a decent Return On Equity value of 20.29%, SM is doing good in the industry, outperforming 68.72% of the companies in the same industry.
The Return On Invested Capital of SM (13.05%) is better than 72.51% of its industry peers.
The 3 year average ROIC (22.74%) for SM is well above the current ROIC(13.05%). The reason for the recent decline needs to be investigated.
With a decent Profit Margin value of 31.80%, SM is doing good in the industry, outperforming 79.62% of the companies in the same industry.
In the last couple of years the Profit Margin of SM has grown nicely.
The Operating Margin of SM (38.33%) is better than 73.93% 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 84.36% of the companies in the same industry.
In the last couple of years the Gross Margin of SM has grown nicely.

A Closer Look at Health for NYSE:SM

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:SM has received a 6 out of 10:

Looking at the Altman-Z score, with a value of 2.57, SM is in the better half of the industry, outperforming 69.19% of the companies in the same industry.
SM has a better Debt to FCF ratio (4.81) than 62.56% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that SM is not too dependend on debt financing.
The Current ratio of SM (1.48) is better than 60.66% of its industry peers.
Looking at the Quick ratio, with a value of 1.48, SM is in the better half of the industry, outperforming 65.88% of the companies in the same industry.

How do we evaluate the Growth for NYSE:SM?

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:SM boasts a 4 out of 10:

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.
Based on estimates for the next years, SM will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.07% on average per year.

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.