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what it is
SM Energy drills for oil, natural gas, and NGLs across major U.S. shale basins.
how it gets paid
Last year Sm Energy made $3.2B in revenue. Crude oil was the main engine at $2.30B, or 72% of sales.
why it's growing
Revenue grew 17.2% last year. $2.4B matters most because it shows how violently this income statement can move when volumes.
what just happened
The quarter was about scale: revenue hit $2.4B and EPS reached $4.69, both far above the prior year.
At a glance
C++ balance sheet — some cracks in the foundation
10/100 earnings predictability — expect surprises
3.0x trailing p/e — the market's not buying it — or you found a deal
3.3% dividend yield — cash in your pocket every quarter
12.0% return on capital — nothing to write home about
xvary composite: 32/100 — weak
What they do
SM Energy drills for oil, natural gas, and NGLs across major U.S. shale basins.
This business wins by owning rock that still pays. SM ended 2024 with 678.3 MMBOE of proved reserves, up 12% from 604.9 MMBOE in 2023. Concentration in the Eagle Ford and Williston gives you scale in places that already work, and a 31.7% operating margin says the wells are doing their job.
How they make money
$3.2B
annual revenue · their business grew +17.2% last year
Crude oil
$2.30B
+17.2%
Natural gas
$0.45B
+17.2%
Natural gas liquids
$0.35B
+17.2%
Other oil and gas revenue
$0.10B
0.0%
The products that matter
sells crude oil
Oil Sales
$2.1B · 65.6% of revenue
It's the larger revenue stream at $2.1B, which means your quarter still swings mainly with oil pricing and production volumes.
core driver
sells gas and liquids
Natural Gas & NGLs
$1.1B · 34.4% of revenue
This $1.1B stream gives you diversification, but not insulation. It's still only about one-third of revenue.
secondary lever
Key numbers
3.0x
trailing p/e
P/E → price-to-earnings → what you pay for each dollar of profit. At 3.0x, the market is pricing in a short shelf life or a commodity hit.
31.7%
operating margin
Operating margin → profit after running the business → how much room management has when oil prices wobble. This is strong for a cyclical producer.
$2.3B
long-term debt
Debt → borrowed money → fixed obligations that do not care where oil trades. This is the main reason a cheap stock can stay cheap.
678.3 MMBOE
proved reserves
Proved reserves → drillable inventory already counted → the future cash register. Reserves rose 12% vs. prior year, which keeps the story alive.
Financial health
C++
strength
- balance sheet grade C++ — below average — limited financial resources
- risk rank 4 — safer than 20% of stocks
- price stability 15 / 100
- long-term debt $2.3B (26% of capital)
C++ — below average. watch for debt servicing and cash burn.
Total return vs. market
Return history isn't available for SM right now.
source: institutional data · return history unavailable
What just happened
beat estimates
The quarter was about scale: revenue hit $2.4B and EPS reached $4.69, both far above the prior year.
EDGAR shows latest-quarter revenue rose 202% vs. prior year and EPS jumped 247%. Deadpan fact bomb: one quarter produced 75% of the year's $3.2B revenue base.
$2.4B
revenue
$4.69
eps
202%
revenue growth
the number that mattered
$2.4B matters most because it shows how violently this income statement can move when volumes, pricing, or deal effects line up.
source: SEC filing, 2025
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What could go wrong
The #1 risk here is Civitas merger execution on top of already weaker profitability. SM is trying to integrate a $12.8B deal after net margin already fell from 29.9% to 20.5%.
high
civitas integration risk
The pending $12.8B merger is bigger than SM's own ~$6B market cap. Big deals can create scale. They can also create operational chaos.
If the deal closes and margins keep sliding below 20.5%, the low multiple will stop looking like a bargain.
high
commodity price exposure
Oil sales are $2.1B, or 65.6% of revenue. Natural gas and NGLs add another $1.1B. You are exposed to both energy markets, with oil still doing most of the work.
Between the two streams, 100% of the current $3.2B revenue base depends on commodity pricing.
med
production softness
Q4 revenue fell to $705M from $852M a year earlier while production slipped 1% to 206.9 MBoe/d. Expense control helped, but volume was not the hero.
If production misses the 146–153 MMBoe guide after the deal, the merger narrative loses credibility fast.
med
balance sheet pressure
SM already carries $2.3B of long-term debt, equal to 26% of capital, and a C++ balance sheet grade grade. That is manageable until the business turns against you.
Debt servicing matters more when revenue estimates are only around $3B and price stability is 15 / 100.
$2.1B of oil sales exposure, $1.1B of gas and NGL exposure, and $2.3B of debt mean this stock can stay cheap for very rational reasons.
source: institutional data · regulatory filings · risk analysis
Pay attention to
deal
civitas merger closing
January 30, 2026 is the stated close date. Shareholders already approved it with 99.1% of the vote. Now you care about final conditions and day-one execution.
production
146–153 MMBoe guide
This is the production range flagged for 2026. If the combined business cannot land inside it, the scale story gets weaker immediately.
margin
profitability after the deal
Net margin fell from 29.9% to 20.5%. You want that slide to stop. If it keeps going, 3.0x earnings is not a steal. It's a message.
leadership
ceo handoff on march 1
Herbert Vogel is set to retire and COO Javan McDonald is expected to step in. Management changes are normal. Management changes during a $12.8B merger are not trivial.
Analyst rankings
earnings predictability
10 / 100
In human-speak: analysts do not think this company delivers smooth, easy-to-model earnings.
risk rank
4
That puts it safer than roughly 20% of stocks. Translation: this is not the part of your portfolio you forget about.
balance sheet grade
C++
Below-average balance sheet quality. The company is still investable. It just is not carrying fortress-level finances into the merger.
source: institutional data
Institutional activity
institutional ownership data for SM is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$19
current price
n/a
target midpoint · n/a from current
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