SMNEUTRAL

Gross Margin

41.8%

Higher than 64% of Energy sector peers

Updated 70h ago

Sector Performance

64th percentile

41.8%

Sector Median

32.4%

Sector Avg

39.3%

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Deep Analysis

Gross margin is the percentage of revenue a company retains after paying the direct costs of producing its goods or services; at 41.8%, SM Energy keeps about 42 cents of every dollar of sales after covering production expenses.

This is above the Energy sector median of 32.9%, placing SM in the 62nd percentile among peers, meaning it performs better than most on this profitability measure. The year-over-year change is not available, but the quarter-over-quarter change shows a sharp decline of 41.2% from 71.1% to the current 41.8%. A gross margin that is above the sector median but recently dropped steeply suggests a possible short-term cost pressure or revenue mix shift, increasing near-term investment risk even though the level remains competitive. The overall NEUTRAL verdict is supported by this combination: the strong relative level offers some fundamental buffer, but the abrupt quarterly contraction warns against outright bullishness.

Frequently Asked Questions

What does the Gross Margin tell investors about SM?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does SM's Gross Margin compare to its sector?

SM's Gross Margin of 41.8% compares to a Energy sector median of 32.4%, placing it in the 64th percentile.

Who are SM's closest peers by Gross Margin?

The closest Energy peers by Gross Margin include: NOG (32.9%), CVE (31.8%), LNG (31.7%), PXD (34.2%), RUN (30.4%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.