Yahoo Finance Is SM Energy (SM) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
SM Energy (SM) is a stock many investors are watching right now. SM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.13, while its industry has an average P/E of 10.94. Over the past year, SM's Forward P/E has been as high as 8.92 and as low as 4.41, with a median of 6.20.
We should also highlight that SM has a P/B ratio of 1.54. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.51. Within the past 52 weeks, SM's P/B has been as high as 1.64 and as low as 0.98, with a median of 1.32.
Finally, investors should note that SM has a P/CF ratio of 3.95. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. SM's P/CF compares to its industry's average P/CF of 7.94. Within the past 12 months, SM's P/CF has been as high as 4.21 and as low as 1.72, with a median of 2.95.
Value investors will likely look at more than just these metrics, but the above data helps show that SM Energy is likely undervalued currently. And when considering the strength of its earnings outlook, SM sticks out at as one of the market's strongest value stocks.
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SM Energy Company (SM) : Free Stock Analysis Report
