Is SM Energy Co. overvalued or undervalued?

As of 30 June 2025, the valuation grade for SM Energy Co. has moved from fair to attractive, indicating a positive shift in its valuation outlook. The company appears undervalued, particularly when considering its P/E ratio of 3, a Price to Book Value of 0.65, and an EV to EBITDA of 2.76. In comparison to peers, Ovintiv, Inc. has a much higher P/E of 6.38, while Murphy Oil Corp. shows a more favorable EV to EBITDA of 4.03, reinforcing SM Energy Co.'s attractive valuation.
Despite the attractive valuation, SM Energy Co. has underperformed against the S&P 500 over the year, with a return of -33.19% compared to the index's 17.14%. However, its impressive 5-year return of 1178.50% suggests strong long-term potential, further supporting the view that the stock is currently undervalued.