NYSE:SM is an undervalued gem with solid fundamentals.

Last update: Nov 26, 2024

Discover SM ENERGY CO (NYSE:SM)—an undervalued stock our stock screener has picked out. NYSE:SM demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

What does the Valuation looks like for NYSE:SM

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:SM has earned a 8 for valuation:

A Price/Earnings ratio of 6.98 indicates a rather cheap valuation of SM.
Compared to the rest of the industry, the Price/Earnings ratio of SM indicates a rather cheap valuation: SM is cheaper than 80.88% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of SM to the average of the S&P500 Index (29.56), we can say SM is valued rather cheaply.
The Price/Forward Earnings ratio is 5.90, which indicates a rather cheap valuation of SM.
Based on the Price/Forward Earnings ratio, SM is valued cheaper than 82.35% of the companies in the same industry.
SM's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.20.
Based on the Enterprise Value to EBITDA ratio, SM is valued a bit cheaper than the industry average as 79.41% of the companies are valued more expensively.
SM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. SM is cheaper than 65.69% 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.
SM has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as SM's earnings are expected to grow with 12.49% in the coming years.

Exploring NYSE:SM's Profitability

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:

SM has a better Return On Assets (10.33%) than 75.49% of its industry peers.
SM has a better Return On Equity (20.41%) than 72.55% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.76%, SM is in the better half of the industry, outperforming 68.63% of the companies in the same industry.
The last Return On Invested Capital (10.76%) 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.
With an excellent Profit Margin value of 33.89%, SM belongs to the best of the industry, outperforming 81.86% of the companies in the same industry.
SM's Profit Margin has improved in the last couple of years.
SM has a Operating Margin of 38.74%. This is in the better half of the industry: SM outperforms 76.96% of its industry peers.
In the last couple of years the Operating Margin of SM has grown nicely.
Looking at the Gross Margin, with a value of 77.12%, SM belongs to the top of the industry, outperforming 87.75% of the companies in the same industry.
SM's Gross Margin has improved in the last couple of years.

Health Insights: NYSE:SM

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:SM has achieved a 6 out of 10:

SM's Altman-Z score of 2.14 is fine compared to the rest of the industry. SM outperforms 61.27% of its industry peers.
A Current Ratio of 3.52 indicates that SM has no problem at all paying its short term obligations.
SM's Current ratio of 3.52 is amongst the best of the industry. SM outperforms 83.82% of its industry peers.
SM has a Quick Ratio of 3.52. This indicates that SM is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 3.52, SM belongs to the top of the industry, outperforming 85.29% of the companies in the same industry.

Growth Analysis for NYSE:SM

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:SM has achieved a 6 out of 10:

The Earnings Per Share has grown by an nice 14.92% over the past year.
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.
Based on estimates for the next years, SM will show a quite strong growth in Revenue. The Revenue will grow by 12.61% on average per year.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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Check the latest full fundamental report of SM for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.