Smart Money Ratings For 20 Most Undervalued Stocks

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4. SM Energy Company (NYSE:SM)

Insider Transaction: 0.66%

Upside Potential: 68.07%

Forward P/E: 4.11

SM Energy Company (NYSE:SM) explores and produces oil and natural gas. The company is located in Colorado and primarily focuses on the Midland Basin and South Texas. Centennial Resource Development and similar companies raise the level of competition in the market, but by concentrating on resource-rich shale formations, SM Energy Company (NYSE:SM) acquires a competitive edge. The company’s outlook remains dependent on commodity price volatility, regulatory developments, and capital allocation strategies within a competitive upstream oil and gas sector.

Currently 8.36% above its yearly low, SM Energy Company (NYSE:SM)’s value hovers within a familiar range. In the first quarter of 2025, the company demonstrated its business growth with a 30% increase in oil production and a 20% increase in overall production. SM Energy Company (NYSE:SM) has successfully completed the Uinta Basin, and its assets have surpassed its early expectations. The company anticipates consistency in higher lease operating expenses, among other costs, for 2025. However, through a disciplined approach to capital allocation, which partly involves choosing debt reduction over stock repurchases, the company aims to control its expenses and increase its earnings.

Insider buying stands at 0.66%, indicating a cautious management sentiment. The 4.11 forward P/E ratio signals suppressed market expectations. Nonetheless, the company is also marketed by strong institutional interest, with 38 hedge funds maintaining their stake, as per Insider Monkey’s Q4 2024 database. SM Energy Company (NYSE:SM)’s upside potential has been estimated to be 68.07%, making the company stand out as one of the most undervalued stocks in our list.

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