Devon Energy Corporation (DVN)

FairStock Score: 75/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look at Devon as a cyclical commodity producer, not a franchise with a durable moat. It operates in several U.S. basins and sells oil, gas, and liquids at market prices, so earnings depend heavily on energy prices and cost control. The balance sheet is a relative strength: debt-to-equity is 0.28, and in fiscal 2025, the year ended 2025-12-31, Devon earned $2.6B of net income on $16.8B of revenue. But the record is uneven. In fiscal Q1 2026, the quarter ended 2026-03-31, revenue was $4.5B but net income was only $120M and diluted EPS $0.19, while fiscal Q2 2026, the quarter ended 2026-06-30, rebounded to $7.0B of revenue, $1.9B of net income, and $2.03 EPS. Compared with fiscal Q2 2025, the quarter ended 2025-06-30, revenue rose from $4.0B and net income from $899M. FairStock's price-based math at the 2026-10-26 close of $51.64 shows a P/E of 11.23, P/B of 1.42, Graham Number of $61.29, and a 16.15% margin of safety, with EV/EBITDA at 7.64. That looks modestly cheap, but the FCF yield is only 2.6%, ROE is 11.52%, ROCE is 5.91%, and Altman Z is 1.58. Piotroski is 6/9. The Lynch category is correctly cyclical: Oil & Gas E&P earnings follow the economic cycle. I would want a wider discount to compensate for commodity risk and volatile cash generation.

In plain English: Devon Energy is a U.S. oil and gas producer. Its business looks financially solid but is tied to energy prices, and results swing from quarter to quarter. At the recent price, the shares look modestly cheap compared with the company's assets and earnings, though the cash generated relative to the share price is modest and the cycle is a real risk.

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Data as of 2026-10-26 close · note generated 2026-10-28 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer