Should Value Investors Buy SM Energy (SM) Stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.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.One company value investors might notice is SM Energy (SM). SM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 5.62 right now. For comparison, its industry sports an average P/E of 11.31. Over the last 12 months, SM's Forward P/E has been as high as 8.92 and as low as 4.35, with a median of 6.20.Another notable valuation metric for SM is its P/B ratio of 1.14. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. SM's current P/B looks attractive when compared to its industry's average P/B of 1.84. SM's P/B has been as high as 1.64 and as low as 1.03, with a median of 1.30, over the past year.Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. SM has a P/S ratio of 1.91. This compares to its industry's average P/S of 2.15.Finally, our model also underscores that SM has a P/CF ratio of 2.97. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. SM's P/CF compares to its industry's average P/CF of 6.26. Over the past year, SM's P/CF has been as high as 4.21 and as low as 2.67, with a median of 3.30.These figures are just a handful of the metrics value investors tend to look at, but they help show that SM Energy is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, SM feels like a great value stock at the moment.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SM Energy Company (SM): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks