Devon Energy Corporation (DVN) Intrinsic Value & DCF Valuation
Oil & Gas Exploration & Production · NYSE
Current Price
$51.63
Intrinsic Value
Outside reliable range
What Is Devon Energy Corporation's Intrinsic Value?
The base-case DCF model produces an intrinsic value estimate for Devon Energy Corporation (DVN) that falls outside its reliable range, so treat any single number with extra caution. This usually happens with unusual cash flow patterns or rapid recent changes in the business.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Devon Energy Corporation (DVN) Undervalued?
Because the model output for DVN is outside the reliable range, no undervalued or overvalued read is given here. Use the calculator below to test your own assumptions instead.
COMPETITIVE MOAT
↑Permian Basin Dominance
Devon Energy possesses significant, low-cost production assets in the Permian Basin. This prime acreage offers a long-term competitive advantage due to its prolific nature and established infrastructure.
↑Operational Efficiency & Cost Leadership
The company demonstrates strong operational execution and cost management. This allows them to generate superior returns even in volatile commodity price environments.
↑Disciplined Capital Allocation
Devon's focus on shareholder returns through dividends and buybacks, coupled with strategic divestitures like the Eagle Ford sale, signals prudent capital management. This enhances long-term value creation.
INVESTMENT RISKS
↓Geopolitical Instability
Global political events can significantly disrupt oil supply and demand, leading to price shocks. This creates uncertainty for production and revenue forecasts.
↓Technological Disruption
Advancements in renewable energy and energy storage technologies could reduce long-term demand for fossil fuels. This poses a secular threat to the industry's future.
↓Execution Risk on Acquisitions/Divestitures
While the Eagle Ford sale was positive, future strategic moves carry execution risk. Poorly managed transactions could dilute shareholder value or impair operational efficiency.
Base case
DVN base case valuation
Base case assumptions: -1.7% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-10-28.
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)
$21.00
FCF/Share (TTM)
$1.79
ROIC (TTM)
5.6%
ROE (TTM)
14.9%
P/FCF
33.7x
EV/EBITDA
7.6x
FCF Yield
2.97%
Debt/Equity
0.28x
Based on trailing twelve-month data, DVN shows a free cash flow per share of $1.79 and a ROIC of 5.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 33.7x and FCF yield of 2.97% 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 $1.79 in free cash flow per share. At the current price of $51.63, 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 33.7x with a free cash flow yield of 2.97%. This P/FCF is in a moderate range. 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 ($1.79) 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 0.28x, 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 5.6% means the company's return on invested capital sits below the level that typically clears its cost of capital.
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 0.28x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 7.6x, 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 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.