SM Energy falls 15.3% after Q3 results and guidance notes

What happened

SM Energy (SM) fell 15.3% on November 4, 2026, because of third-quarter results that missed earnings expectations and guidance that drilling may shift early next year. The company reported earnings per share of $1.95 against $2.01 expected for the quarter and disclosed operating cash flow of $1.1 billion, according to Seeking Alpha and Zacks Investment Research. Reuters reported the company said it may shift drilling activity in early 2027 because of constraints in the Uinta Basin.

How big was the move

The stock closed at $31.06 after falling 15.3% on the session. Trading volume was 2.8 times its 20-day average and the move was 4.3 times a typical daily move for this stock. The change over the last five sessions fell 21.5%, leaving the stock 11.2 percentage points worse than the Energy sector median on the day, when the sector median fell 4.1% and the S&P 500 rose 1.6%. The session’s price action occurred against a market-sensitivity backdrop of a beta of 0.04, indicating the stock typically moves less than the broader market.

The technical picture

Technically, the stock sat 18.7% below its 20-day moving average and 16.2% below its 50-day moving average, while it remained 1.6% above its 200-day moving average. The 50-day average is above the 200-day average, a sign of an established uptrend, and the stock had spent 173 consecutive trading days above the 200-day average. The Relative Strength Index (14 days) was 29 at the session close, below 30, a level often called oversold. The stock was 25.3% below the 52-week high. Performance measures showed the stock fell 11.5% over one month, rose 8.2% over three months and rose 60.5% over one year, which was 48.3 percentage points ahead of the S&P 500. Volatility was 57% annualized over 60 days, higher than 67% of its own readings over five years.

Fundamentals and valuation

For the four quarters through September 30, 2026, revenue was $6.87 billion, which grew 110.0% from a year earlier. Diluted earnings per share for that period were $2.89, while earnings per share growth from a year earlier fell 54.3%. Gross margin widened to 59.9% from 37.6% a year earlier, while operating margin was 31.0% versus 33.8% a year earlier. Free-cash-flow margin was 4.0% and return on invested capital was 6.8%. The balance sheet showed net debt of 1.6 times EBITDA, and share count over one year increased by 107.4%.

On valuation, the stock traded at 10.7 times trailing earnings and 3.9 times expected earnings. Its price to trailing earnings was higher than 80% of its own readings over the past five years, where the five-year median is 5.6 times earnings. Free-cash-flow yield was 2.8% in the reported period. PromtFinance scores ranked the company strongly for Growth at 80 and Momentum at 84, while Stability and Revisions were weaker at 35 and 44, respectively.

Earnings and analyst expectations

SM Energy last reported on November 3, 2026, posting quarterly earnings of $1.95 per share against $2.01 expected, 3.0% below estimates. The company held its Q3 2026 earnings call on November 4, 2026, and investor materials and slides were made available on the company website, according to Seeking Alpha and Zacks Investment Research. The company said operating cash flow was $1.1 billion, which it used to redeem $417 million of debt and return $133 million to shareholders, per the same reports.

Consecutive quarters beating estimates stood at 0, though the average surprise over the last four reports was 11.8% above estimates. The stock’s typical two-day reaction after recent reports was fell 2.3%. Analysts covering SM numbered 54, with a consensus price target of $40.82, which is 31.4% above the closing price, and 65% of ratings were Buy or Strong Buy; the consensus rating was Buy. The next report is scheduled for February 24, 2027.

What to watch

• February 24, 2027: next scheduled earnings report
• The company's commentary on shifting drilling activity in early 2027 because of constraints in the Uinta Basin (reported by Reuters)
• Any updates to free-cash-flow margin and uses of operating cash flow after redeeming $417 million of debt and returning $133 million to shareholders
• Changes in share count trends after share count over one year increased by 107.4%
• Movements in EPS relative to estimates after the November 3, 2026, report showing EPS of $1.95 against $2.01 expected