Devon Energy Corporation (DVN) Intrinsic Value & DCF Valuation
Oil & Gas Exploration & Production · NYSE
Current Price
$44.18
Intrinsic Value
$54.49
+18.9% margin of safety
What Is Devon Energy Corporation's Intrinsic Value?
As of 2026-07-30, the base-case DCF model estimates the intrinsic value of Devon Energy Corporation (DVN) at $54.49 per share, compared with a market price of $44.18, a margin of safety of +18.9%. The base case assumes 2.8% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $47.69 to $62.53. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Devon Energy Corporation (DVN) Undervalued?
At $44.18, DVN trades about 18.9% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Low-Cost Production Assets
Devon possesses high-quality, low-cost oil and gas reserves in prime U.S. basins. This allows for strong profitability even during commodity price downturns.
↑Operational Efficiency and Scale
The company's extensive infrastructure and expertise in efficient extraction drive down per-barrel costs. This scale provides a significant competitive advantage.
↑Disciplined Capital Allocation
Devon's focus on returning capital to shareholders through dividends and buybacks, alongside strategic reinvestment, enhances shareholder value. This disciplined approach attracts investors.
INVESTMENT RISKS
↓Geopolitical Instability
Global events can significantly disrupt oil supply chains and demand, leading to price shocks. Geopolitical tensions create uncertainty for the entire E&P sector.
↓Transition to Renewable Energy
The long-term global shift towards cleaner energy sources could reduce demand for fossil fuels. This secular trend poses a strategic challenge for oil and gas companies.
↓Execution Risk on Acquisitions
While strategic acquisitions can enhance growth, integration challenges and overpayment can destroy shareholder value. Successful execution is critical.
Base case
DVN base case valuation
Intrinsic Value
$54.49
Margin of safety
+18.9%
Expected annual return
+4.3%
Base case assumptions: 2.8% annual growth, 10.0% discount rate, 10x exit multiple, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DVN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Devon Energy Corporation respond.
Open DCF Calculator for DVNCompany Overview
As an independent energy producer, Devon Energy Corporation primarily focuses on the exploration, development, and extraction of oil, natural gas, and natural gas liquids within the United States. The company manages roughly 5,134 gross wells. Established in 1971, its corporate headquarters are located in Oklahoma City, Oklahoma.
Financial Metrics — DVN Stock Valuation Data
Revenue/Share (TTM)
$26.64
FCF/Share (TTM)
$4.24
ROIC (TTM)
8.3%
ROE (TTM)
14.8%
P/FCF
10.4x
EV/EBITDA
4.8x
FCF Yield
9.60%
Debt/Equity
0.56x
Based on trailing twelve-month data, DVN shows a free cash flow per share of $4.24 and a ROIC of 8.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 10.4x and FCF yield of 9.60% are important context metrics when evaluating DVN's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DVN?
Devon Energy Corporation currently generates $4.24 in free cash flow per share. At the current price of $44.18, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DVN undervalued?
DVN trades at a P/FCF ratio of 10.4x with a free cash flow yield of 9.60%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether DVN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DVN stock using DCF?
To perform a DCF valuation on Devon Energy Corporation: (1) Start with the trailing free cash flow per share ($4.24) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Exploration & Production industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DVN's risk profile — with a debt-to-equity of 0.56x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DVN?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Devon Energy Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Exploration & Production trends, then discounting those amounts to today's dollars. DVN's ROIC of 8.3% shows moderate capital returns.
How does WACC affect DVN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DVN, with a debt-to-equity ratio of 0.56x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 4.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DVN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value DVN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.