SM Energy Q4 Revenue at $705M, Below Consensus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Should l Buy SM?
Reports Q4 revenue $705M, consensus $760.57M. Reports Q4 net production of 75.5 MMBoe, or 206.8 MBoe/d; up 21% year-over-year, of which 53% was oil. The company said, "SM Energy enters its next chapter as a century-strong, future-ready company," said President and CEO Beth McDonald. "In 2025, we delivered record cash flow from operations and record net production. We've built great momentum for 2026 with expanded scale and a clear strategic plan to create differentiating value. We're rapidly integrating the combined business and unlocking meaningful synergies. With our recently announced $950 million South Texas asset divestiture at an accretive valuation, we are well on our way to achieving our $1.0 billion divestiture target to bolster the balance sheet and enhance return of capital."
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Analyst Views on SM
Wall Street analysts forecast SM stock price to rise
8 Analyst Rating
4 Buy
4 Hold
0 Sell
Moderate Buy
Current: 23.130
Low
23.00
Averages
30.00
High
42.00
Current: 23.130
Low
23.00
Averages
30.00
High
42.00
About SM
SM Energy Company is an independent energy company. The Company is engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids (NGLs) in the states of Texas and Utah. Its asset portfolio comprises assets in the Midland Basin of West Texas, the Maverick Basin of South Texas, and the Uinta Basin of northeastern Utah. Its Midland Basin assets are located in the Permian Basin in West Texas, are comprised of over 110,000 net acres, and include its RockStar assets in Howard and Martin counties, Sweetie Peck assets in Upton and Midland counties, and Klondike assets in Dawson and northern Martin counties. Its South Texas assets are comprised of over 155,000 net acres located in Dimmit and Webb counties, Texas. Its overlapping acreage position in South Texas covers a portion of the western Eagle Ford shale and Austin Chalk formations. Its Uinta Basin assets comprise over 63,300 net acres located in northeastern Utah.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Yield Performance: The forward yield of 3.99% is competitive in the current market environment, likely appealing to income-seeking investors and potentially enhancing the stock's market performance.
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- Strategic Integration and Synergies: The company is rapidly integrating its merger with Civitas Resources, which is anticipated to unlock significant synergies, further driving the company's growth strategy for 2026.
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See More
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- Oil Price Surge: Brent crude prices soared approximately 8% to about $78.70 per barrel on Monday, driven by heightened concerns over potential supply disruptions due to U.S.-Iran hostilities.
- Market Reaction: Following the assassination of Iran's Supreme Leader Khamenei in joint U.S.-Israeli strikes, traders rushed to gain energy exposure, resulting in significant pre-market gains for related ETFs, highlighting the market's sensitivity to energy price fluctuations.
- Strait of Hormuz Risks: The potential closure of the Strait of Hormuz, responsible for over 27% of global crude oil shipments, has raised alarm among retail traders, further exacerbating market uncertainty amid escalating tensions.
- Military Action Outlook: President Trump indicated that the current military operations against Iran could last four to five weeks, intensifying market expectations for future oil price volatility and prompting investors to reassess their energy asset allocations.
See More
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- Market Opening: U.S. stock markets are set to open in two hours.
- AeroVironment Inc. Performance: AeroVironment Inc. (AVAV) saw a 10.2% increase in pre-market trading.
- SM Energy Co. Performance: SM Energy Co. (SM) experienced a 9.5% rise in pre-market trading.
- Overall Market Sentiment: The pre-market gains indicate positive sentiment among investors for these companies.
See More
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- Dividend Increase: SM Energy has declared a quarterly dividend of $0.22 per share, marking a 10% increase from the previous $0.20, indicating ongoing improvements in cash flow and profitability, which is expected to boost investor confidence and attract more shareholders.
- Yield Performance: The forward yield of 3.99% is competitive in the current market environment, likely appealing to income-seeking investors and potentially enhancing the stock's market performance.
- Shareholder Arrangement: The dividend will be payable on March 23, with a record date of March 9 and an ex-dividend date also on March 9, ensuring shareholders receive timely returns, thereby strengthening the relationship between the company and its investors.
- Financial Performance Overview: While SM Energy's non-GAAP EPS of $0.83 met expectations, its revenue of $705 million fell short of the anticipated $760.57 million, indicating challenges in revenue growth that may necessitate measures to improve sales performance.
See More
SM Energy Reports Record Production and Cash Flow for 2025
- Record Cash Flow: In 2025, SM Energy achieved a record operating cash flow of $2.011 billion, a 12.8% increase from 2024, providing robust support for future investments and shareholder returns.
- Net Production Growth: The company's net oil production reached 40.3 million barrels in 2025, a 37% increase from 2024, indicating significant advancements in resource development and production efficiency, thereby enhancing market competitiveness.
- Asset Divestiture Plan: SM Energy announced the divestiture of South Texas assets for $950 million, which is expected to help achieve a $1 billion divestiture target, thereby improving the balance sheet and enhancing capital returns.
- Strategic Integration and Synergies: The company is rapidly integrating its merger with Civitas Resources, which is anticipated to unlock significant synergies, further driving the company's growth strategy for 2026.
See More
SM Energy Company 2026 Outlook and Shareholder Return Plan
- Maximizing Free Cash Flow: SM Energy aims to maximize free cash flow through disciplined investments in high-return development projects, with total production expected to reach 146-153 MMBoe in 2026, showcasing the company's efficiency in resource allocation and potential for future growth.
- Increased Shareholder Returns: The company announced a 10% increase in its quarterly dividend to $0.22 per share, payable on March 23, 2026, which not only boosts shareholder confidence but also reflects the company's strong financial health and optimistic outlook for the future.
- Optimized Capital Expenditures: Projected capital expenditures for 2026 are set at $2.65-$2.85 billion, a 14% reduction from 2025, achieved by lowering drilling and completion activities to enhance capital efficiency, thereby generating higher free cash flow and returns for shareholders.
- Asset Sales and Integration: The company plans to complete a $950 million asset sale in 2026 and integrate Civitas's operations, which is expected to yield synergies that further enhance financial flexibility and market competitiveness.
See More
SM Energy to Announce Q4 Earnings on February 25
- Earnings Announcement Schedule: SM Energy is set to announce its Q4 earnings on February 25 after market close, with consensus EPS estimated at $0.83 and revenue at $760.57 million, reflecting a 10.8% year-over-year decline, which may influence investor expectations regarding the company's future performance.
- Historical Performance: Over the past two years, SM Energy has beaten EPS estimates 100% of the time and revenue estimates 75% of the time, indicating a strong track record in profitability that could bolster market confidence.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen one upward revision and 12 downward revisions, while revenue estimates have had no upward revisions and nine downward revisions, reflecting a cautious market outlook on the company's future performance, potentially impacting stock price volatility.
- Asset Transactions and Financing Arrangements: SM Energy has completed a $950 million asset sale to Caturus Energy and amended its credit facility to raise its borrowing base and extend maturity, which will help improve its financial position and provide funding support for future growth.
See More
