- The 5 Most Interesting Analyst Questions From SM Energy’s Q1 Earnings Call
May 16, 2026
SM Energy's first quarter performance outpaced Wall Street’s expectations, underpinned by a surge in oil production following its recent merger with Civitas. Management credited the strong start to successful operational integration, improved well productivity, and early realization of cost synergies. CEO Elizabeth McDonald highlighted, “We delivered production over the top end of guidance, capital below guidance and synergy capture that is tracking nearly 2x our original target.” Despite these achievements, operating margins declined sharply, reflecting the impact of merger-related costs and commodity hedging.
Is now the time to buy SM? Find out in our full research report (it’s free).
SM Energy (SM) Q1 CY2026 Highlights:
Revenue: $1.48 billion vs analyst estimates of $1.40 billion (75.1% year-on-year growth, 5.8% beat) Adjusted EPS: $1.55 vs analyst estimates of $1.13 (37.8% beat) Adjusted EBITDA: $944 million vs analyst estimates of $899.6 million (63.8% margin, 4.9% beat) Operating Margin: -20.1%, down from 32.7% in the same quarter last year Oil production per day: up 83.5% year on year Market Capitalization: $7.52 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From SM Energy’s Q1 Earnings Call
Zachary Parham (JPMorgan): Asked about the potential for increased activity if oil prices remain high. CEO Elizabeth McDonald responded that 2026 priorities remain unchanged, citing a preference to return capital over adding near-term activity. Phu Pham (ROTH Capital Partners): Inquired about well productivity and costs in the Uinta Basin. COO Blake McKenna explained that recent results were strong and the area benefits from integrated operations and new technology deployment. Gabe Daoud (Truist): Questioned the company’s confidence in U-turn wells in the Permian and technical differentiation in Howard County. McKenna described recent success with these well types and ongoing efforts to access challenging acreage. Jack Kindregan (BMO Capital Markets): Sought clarity on inventory runway and how higher oil prices affect resource economics. McDonald noted that higher prices extend economic inventory, with technical teams continuing to identify new opportunities. Michael Scialla (Stephens): Asked about the balance between debt reduction and share buybacks. CFO Wade Pursell noted that buybacks could increase as leverage targets are met and additional divestitures are completed.
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Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will closely monitor (1) the pace and impact of synergy realization from the Civitas merger, (2) execution on planned share buybacks and continued debt reduction, and (3) operational efficiency improvements across key basins, particularly in the DJ and Uinta. The company’s ability to optimize its portfolio through further asset sales and maintain capital discipline will also be key factors to watch.
SM Energy currently trades at $31.46, up from $28.55 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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- Donald Smith & Co's Strategic Moves: A Closer Look at SM Energy Co's 4.04% Portfolio Impact
May 14, 2026
This article first appeared on GuruFocus.
Exploring the Investment Strategies of Donald Smith & Co (Trades, Portfolio)
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Donald Smith & Co (Trades, Portfolio) recently submitted the 13F filing for the first quarter of 2026, offering a glimpse into the firm's strategic investment decisions. Founded by Donald G. Smith in 1980, the firm has been a beacon of deep-value investing. Smith, who served as the Chief Investment Officer until his passing in 2019, was renowned for his bottom-up approach, focusing on undervalued companies trading below tangible book value. With a background that includes a B.S. in Finance and Accounting from the University of Illinois, an MBA from Harvard University, and a J.D. from UCLA Law School, Smith's investment philosophy was deeply rooted in rigorous analysis and a long-term perspective. His legacy continues to guide the firm's investment strategies, emphasizing stocks with low price-to-tangible book ratios and promising earnings potential over the next 2-4 years.Donald Smith & Co's Strategic Moves: A Closer Look at SM Energy Co's 4.04% Portfolio Impact
Summary of New Buy
Donald Smith & Co (Trades, Portfolio) added a total of 7 stocks, among them:
The most significant addition was SM Energy Co (NYSE:SM), with 7,208,899 shares, accounting for 4.04% of the portfolio and a total value of $224.77 million. The second largest addition to the portfolio was PennyMac Financial Services Inc (NYSE:PFSI), consisting of 1,372,204 shares, representing approximately 2.16% of the portfolio, with a total value of $119.93 million. The third largest addition was Guardian Metal Resources PLC (GMTL), with 1,500,556 shares, accounting for 0.47% of the portfolio and a total value of $26.23 million.
Key Position Increases
Donald Smith & Co (Trades, Portfolio) also increased stakes in a total of 36 stocks, among them:
The most notable increase was Radian Group Inc (NYSE:RDN), with an additional 1,593,520 shares, bringing the total to 4,605,775 shares. This adjustment represents a significant 52.9% increase in share count, a 0.95% impact on the current portfolio, with a total value of $152.36 million. The second largest increase was Ally Financial Inc (NYSE:ALLY), with an additional 1,296,806 shares, bringing the total to 4,019,715. This adjustment represents a significant 47.63% increase in share count, with a total value of $157.69 million.
Summary of Sold Out
Donald Smith & Co (Trades, Portfolio) completely exited 5 holdings in the first quarter of 2026, as detailed below:
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Civitas Resources Inc (CIVI): Donald Smith & Co (Trades, Portfolio) sold all 4,485,476 shares, resulting in a -2.28% impact on the portfolio. Equinox Gold Corp (EQX): Donald Smith & Co (Trades, Portfolio) liquidated all 7,049,326 shares, causing a -1.85% impact on the portfolio.
Key Position Reduces
Donald Smith & Co (Trades, Portfolio) also reduced positions in 15 stocks. The most significant changes include:
Reduced Iamgold Corp (NYSE:IAG) by 5,151,168 shares, resulting in a -26.24% decrease in shares and a -1.59% impact on the portfolio. The stock traded at an average price of $19.82 during the quarter and has returned -14.29% over the past 3 months and 12.43% year-to-date. Reduced Tutor Perini Corp (NYSE:TPC) by 496,787 shares, resulting in a -27.45% reduction in shares and a -0.62% impact on the portfolio. The stock traded at an average price of $76.54 during the quarter and has returned 0.36% over the past 3 months and 23.90% year-to-date.
Portfolio Overview
At the first quarter of 2026, Donald Smith & Co (Trades, Portfolio)'s portfolio included 61 stocks. The top holdings included 7.78% in AerCap Holdings NV (NYSE:AER), 5.05% in Centerra Gold Inc (NYSE:CGAU), 4.9% in Iamgold Corp (NYSE:IAG), 4.49% in Eldorado Gold Corp (NYSE:EGO), and 4.04% in SM Energy Co (NYSE:SM).Donald Smith & Co's Strategic Moves: A Closer Look at SM Energy Co's 4.04% Portfolio Impact
The holdings are mainly concentrated in 6 of the 11 industries: Financial Services, Basic Materials, Consumer Cyclical, Industrials, Real Estate, and Energy.Donald Smith & Co's Strategic Moves: A Closer Look at SM Energy Co's 4.04% Portfolio Impact
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- SM Energy's (NYSE:SM) Problems Go Beyond Weak Profit
May 14, 2026
A lackluster earnings announcement from SM Energy Company (NYSE:SM) last week didn't sink the stock price. We think that investors are worried about some weaknesses underlying the earnings.
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One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. As it happens, SM Energy issued 109% more new shares over the last year. Therefore, each share now receives a smaller portion of profit. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. You can see a chart of SM Energy's EPS by clicking here.
A Look At The Impact Of SM Energy's Dilution On Its Earnings Per Share (EPS)
Unfortunately, SM Energy's profit is down 90% per year over three years. And even focusing only on the last twelve months, we see profit is down 84%. Sadly, earnings per share fell further, down a full 87% in that time. Therefore, one can observe that the dilution is having a fairly profound effect on shareholder returns.
In the long term, if SM Energy's earnings per share can increase, then the share price should too. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
The Impact Of Unusual Items On Profit
On top of the dilution, we should also consider the US$232m impact of unusual items in the last year, which had the effect of suppressing profit. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect SM Energy to produce a higher profit next year, all else being equal.
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Our Take On SM Energy's Profit Performance
To sum it all up, SM Energy took a hit from unusual items which pushed its profit down; without that, it would have made more money. But on the other hand, the company issued more shares, so without buying more shares each shareholder will end up with a smaller part of the profit. Based on these factors, we think it's very unlikely that SM Energy's statutory profits make it seem much weaker than it is. If you want to do dive deeper into SM Energy, you'd also look into what risks it is currently facing. For example, we've found that SM Energy has 4 warning signs (2 make us uncomfortable!) that deserve your attention before going any further with your analysis.
Our examination of SM Energy has focussed on certain factors that can make its earnings look better than they are. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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- SM Energy Surges 67% in Six Months: Is the Stock Worth Betting on Now?
May 13, 2026
SM Energy Company SM posted a quarterly earnings beat, delivering adjusted earnings of $1.55 per share and total revenues of $1.48 billion, supported by higher oil-equivalent production volumes. The first quarter marked SM’s first full reporting period after the close of the Civitas merger.
The quarterly results showed an impressive 88% increase in the average net daily production, supported by output from the legacy Civitas assets. SM Energy is an independent exploration and production company with an asset portfolio spanning four premier shale basins in the United States: the Permian Basin, DJ Basin, South Texas and the Uinta Basin.
Over the past six months, SM stock has surged 67.2% compared with the industry’s 20% growth. Its peers, Chord Energy Corporation CHRD and EOG Resources EOG, have grown 55.6% and 22.3%, respectively, during the same time frame. While price performance demonstrates the attractiveness of a stock to some extent, it would be wiser to closely examine the company’s current business environment before offering any investment advice.Zacks Investment Research
Image Source: Zacks Investment Research
High-Quality Assets Support SM’s Production Growth
SM Energy has a top-tier asset base spread across four premier shale basins in the United States. The company owns 237,000 net acres in the Permian, 303,000 net acres in the DJ Basin, 94,000 net acres in South Texas and 62,000 net acres in the Uinta Basin, offering exposure to high-margin basins with oil-weighted production. The all-stock merger with Civitas Resources has been a major positive for SM, driving production growth through Civitas’ legacy assets.
The increased production is expected to benefit SM Energy, particularly given the favorable commodity price environment at present. Per the data from oilprice.com, the West Texas Intermediate crude prices are currently hovering around $100 per barrel, significantly higher than the prices seen at the beginning of the year. This is anticipated to boost the company’s earnings and cash flow profile in the near term.
Significant De-Leveraging Efforts Strengthen SM’s Financial Position
SM Energy is taking significant strides to reduce its debt levels and strengthen its balance sheet. The company recently closed the divestiture of its South Texas assets and used $900 million in net proceeds from the transaction to reduce debt. In the first-quarter presentation, SM highlighted that it had retired $894 million of high-coupon debt, yielding $16 million in interest savings. The company has also indicated that it is on track to reduce leverage to the low-1x range earlier than its year-end 2026 target.
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In addition to reducing debt, the company is focused on increasing free cash flow generation. The favorable commodity pricing environment, along with cost savings realized through merger-related synergies, is expected to drive higher free cash flows. SM noted that decreasing leverage and generating higher cash flows will enhance shareholder returns by increasing its allocation toward share buybacks.SM Energy
Image Source: SM Energy
Valuation Snapshot
Coming to the valuation story, SM is currently considered cheap on a relative basis. The stock is trading at a trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA) of 5.76x, which is a discount compared with the broader industry average of 9.78x. Notably, Chord Energy and EOG Resources currently trade at a trailing 12-month EV/EBITDA of 4.03X and 6.27X, respectively.Zacks Investment Research
Image Source: Zacks Investment Research
Time to Invest in the Stock or Wait?
SM Energy is well-positioned to benefit from rising commodity prices and its high-quality inventory spanning premier shale basins across the United States. Its production mix is mainly oil-weighted, enabling it to generate stronger profits in a higher crude price environment. Additionally, ongoing efforts to reduce its leverage and focus on generating higher cash flows should allow SM Energy to support higher shareholder returns.
Given that the stock is trading at a discount, investors should consider buying the SM stock, which sports a Zacks Rank #1 (Strong Buy) at present. CHRD currently sports a Zacks Rank #1, while EOG carries a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
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EOG Resources, Inc. (EOG) : Free Stock Analysis Report
SM Energy Company (SM) : Free Stock Analysis Report
Chord Energy Corporation (CHRD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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- Are Investors Undervaluing SM Energy (SM) Right Now?
May 13, 2026
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is SM Energy (SM). SM is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 4.93 right now. For comparison, its industry sports an average P/E of 10.39. Over the past year, SM's Forward P/E has been as high as 6.51 and as low as 2.85, with a median of 4.90.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SM has a P/S ratio of 1.98. This compares to its industry's average P/S of 1.99.
Talos Energy (TALO) may be another strong Oil and Gas - Exploration and Production - United States stock to add to your shortlist. TALO is a Zacks Rank of #2 (Buy) stock with a Value grade of A.
Talos Energy sports a P/B ratio of 0.62 as well; this compares to its industry's price-to-book ratio of 3.05. In the past 52 weeks, TALO's P/B has been as high as 0.78, as low as 0.42, with a median of 0.61.
Value investors will likely look at more than just these metrics, but the above data helps show that SM Energy and Talos Energy are likely undervalued currently. And when considering the strength of its earnings outlook, SM and TALO sticks out as one of the market's strongest value stocks.
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SM Energy Company (SM) : Free Stock Analysis Report
Talos Energy Inc. (TALO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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- SM Energy Surges 67% in Six Months: Is the Stock Worth Betting on Now?
May 13, 2026 · zacks.com
SM jumps 67% in six months as Civitas merger-fueled production growth and debt reduction strengthen its cash flow outlook.
- Are Investors Undervaluing SM Energy (SM) Right Now?
May 13, 2026 · zacks.com
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
- This Top Oils and Energy Stock is a #1 (Strong Buy): Why It Should Be on Your Radar
May 13, 2026 · zacks.com
Finding strong, market-beating stocks with a positive earnings outlook becomes easier with the Zacks Rank.
- Earnings Estimates Rising for SM Energy (SM): Will It Gain?
May 12, 2026
SM Energy (SM) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving.
Analysts' growing optimism on the earnings prospects of this independent oil and gas company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.
The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.
For SM Energy, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.
The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:
12 Month EPS
Current-Quarter Estimate Revisions
The company is expected to earn $1.83 per share for the current quarter, which represents a year-over-year change of +22.0%.
Over the last 30 days, the Zacks Consensus Estimate for SM Energy has increased 8.67% because two estimates have moved higher while two have gone lower.
Current-Year Estimate Revisions
For the full year, the earnings estimate of $6.86 per share represents a change of +26.6% from the year-ago number.
The revisions trend for the current year also appears quite promising for SM Energy, with four estimates moving higher over the past month compared to one negative revision. The consensus estimate has also received a boost over this time frame, increasing 8.34%.
Favorable Zacks Rank
Thanks to promising estimate revisions, SM Energy currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.
Bottom Line
Investors have been betting on SM Energy because of its solid estimate revisions, as evident from the stock's 6.3% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.
Story Continues
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SM Energy Company (SM) : Free Stock Analysis Report
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- Are Oils-Energy Stocks Lagging SM Energy (SM) This Year?
May 12, 2026
Investors interested in Oils-Energy stocks should always be looking to find the best-performing companies in the group. Has SM Energy (SM) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.
SM Energy is one of 238 individual stocks in the Oils-Energy sector. Collectively, these companies sit at #1 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. SM Energy is currently sporting a Zacks Rank of #1 (Strong Buy).
The Zacks Consensus Estimate for SM's full-year earnings has moved 102.8% higher within the past quarter. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that SM has returned about 64% since the start of the calendar year. Meanwhile, the Oils-Energy sector has returned an average of 28.3% on a year-to-date basis. This means that SM Energy is outperforming the sector as a whole this year.
One other Oils-Energy stock that has outperformed the sector so far this year is Meren Energy (MRNFF). The stock is up 31.5% year-to-date.
The consensus estimate for Meren Energy's current year EPS has increased 62.5% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, SM Energy belongs to the Oil and Gas - Exploration and Production - United States industry, a group that includes 34 individual stocks and currently sits at #11 in the Zacks Industry Rank. Stocks in this group have gained about 24% so far this year, so SM is performing better this group in terms of year-to-date returns.
In contrast, Meren Energy falls under the Alternative Energy - Other industry. Currently, this industry has 50 stocks and is ranked #81. Since the beginning of the year, the industry has moved +23.7%.
Going forward, investors interested in Oils-Energy stocks should continue to pay close attention to SM Energy and Meren Energy as they could maintain their solid performance.
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SM Energy Company (SM) : Free Stock Analysis Report
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Meren Energy Inc. (MRNFF) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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