Is this energy producer still expanding?
Devon Energy is a U.S. energy company focused on oil and gas exploration and production. It develops and operates upstream assets and sells produced hydrocarbons into commodity markets. The business is largely driven by production volumes and realized prices rather than long-duration contracted revenue. At today’s scale, it sits in the large-cap range with a market value around USD 46.6 billion.
Are margins and returns holding steady?
FundamentalsFor the year ended December 31, 2025 (reported in USD), revenue was USD 16.8 billion, up 5.4% year over year, while net income was USD 39.0 million. Profitability metrics over the trailing period show a 43.81% gross margin, a 20.80% operating margin, and a 13.71% net margin, alongside ROE of 14.78%.
On the capital and balance-sheet side, depreciation and amortization totaled USD 3.6 billion and capital spending was USD 545 million. Cash stood at USD 1.4 billion against total debt of USD 8.4 billion, placing the business in a net debt position. A returns-
Is the market missing intrinsic value?
DCF / MultiplesAt USD 40.36, the current price sits well below the discounted cash flow outcomes across a range of modeled scenarios. In that context, the headline multiples—about 20.53x trailing earnings and 7.57x EV/EBITDA—are being applied to a business where the valuation work indicates a materially higher intrinsic value than the market price.
Undervalued but capital heavy
TakeawayThe valuation work points to a wide gap versus price. That gap only holds if returns on capital stay durable. Capital intensity makes missteps costly when conditions change. Debt also limits room for error if cash generation softens. Overall, it reads as undervalued, but not low-risk.