Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 1.90%, lower than industry average of 15.81%.

Growth Trajectory

Profitability

In the growth phase company makes 24.65% profit on every dollar of sales, lower than industry average of 31.59%.

Profitability Trajectory

Risk Profile

Investors expect at least 7.88% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
40.93B USD
Equity Value
33.49B USD
FCF Yield
132.89%
Average ROIC
14.17%
Cost of Capital
8.22%
P/E Ratio
6.74x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues17.16B USD15.94B USD
Operating Income or EBIT4.24B USD4.13B USD
Interest Expense479M USD401M USD
Book Value Of Equity15.06B USD14.50B USD
Book Value Of Debt8.99B USD9.20B USD
Cash and Marketable Securities1.76B USD846M USD
Number of Shares Outstanding636M--
Minority interests208M USD0 USD
Current Stock Price35.52 USD--
Effective Tax Rate21.00%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-8.14%
7.67%Company
vs
15.81%Industry
Below Industry
Operating Margin
-6.91%
24.68%Company
vs
31.59%Industry
Below Industry
Devon Energy Corporation faces challenges in both growth and profitability compared to industry peers, which may indicate competitive pressures or operational inefficiencies.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.82%
Reinvestment Rate
52.09%
Terminal value represents 53% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 21.87B USD Add
Present Value (Cash Flow Over Next 10 Years) 19.06B USD Add
Value of Operating Assets 40.93B USD Sub-total
Debt 8.99B USD Subtract
Minority Interests 208.00M USD Subtract
Cash 1.75B USD Add
Value of Equity 33.49B USD Sub-total
Number of Shares 636.00M shares Divisor
Estimated Value per Share (Fair Value) 52.67 USD Total
Current Market Price 35.52 USD Reference

Financial Projections

Total FCF Present Value
19.06B USD
Avg Revenue Growth
2.45%
Avg Operating Margin
24.64%
Avg ROIC
14.17%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue17.09B USD17.42B USD17.75B USD18.09B USD18.43B USD18.88B USD19.45B USD20.13B USD20.95B USD21.91B USD22.92B USD
Growth Rate -0.38% 1.90% 1.90% 1.90% 1.90% 2.44% 2.98% 3.52% 4.06% 4.59% 4.59%
PROFITABILITY
Operating Income4.22B USD4.29B USD4.37B USD4.45B USD4.54B USD4.65B USD4.78B USD4.95B USD5.15B USD5.39B USD5.64B USD
Operating Margin 24.68% 24.66% 24.64% 24.63% 24.62% 24.62% 24.62% 24.62% 24.62% 24.62% 24.62%
EBIT (1-tax)3.33B USD3.39B USD3.45B USD3.52B USD3.58B USD3.63B USD3.70B USD3.79B USD3.91B USD4.04B USD4.23B USD
CASH FLOW
Reinvestment427.59M USD435.73M USD444.03M USD452.49M USD591.63M USD844.12M USD1.02B USD1.22B USD1.44B USD1.51B USD2.20B USD
Free Cash Flow2.90B USD2.95B USD3.01B USD3.06B USD2.99B USD2.79B USD2.68B USD2.57B USD2.46B USD2.53B USD2.02B USD
Terminal Value--------------------47.95B USD
Present Value2.69B USD2.54B USD2.40B USD2.26B USD2.04B USD1.76B USD1.56B USD1.38B USD1.22B USD1.15B USD—
EFFICIENCY
ROIC 14.95% 14.94% 14.93% 14.92% 14.91% 14.75% 14.54% 14.32% 14.09% 13.87% 8.82%
Cost of Capital 7.87% 7.87% 7.87% 7.87% 7.87% 8.06% 8.25% 8.44% 8.63% 8.82% 8.83%
Sales/Capital 0.76x 0.76x 0.76x 0.76x 0.76x 0.66x 0.66x 0.66x 0.66x 0.66x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)