Is Kenon Holdings Ltd. overvalued or undervalued?

As of 28 August 2025, the valuation grade for Kenon Holdings Ltd. has moved from very attractive to risky. Based on the current metrics, the company appears to be overvalued. The P/E ratio stands at 28, significantly higher than the peer average of approximately 24.26, while the EV to EBITDA ratio of 15.79 is also elevated compared to peers like Portland General Electric Co., which has a more attractive EV to EBITDA of 10.09. Additionally, the PEG ratio of 0.20 suggests that the stock may not be justified at its current price given its growth prospects.
In terms of peer comparison, Kenon Holdings Ltd. is positioned unfavorably against companies such as PNM Resources, Inc. with a P/E of 30.05 and Ormat Technologies, Inc. at 41.04, both of which are deemed very expensive. The company's recent stock performance shows a year-to-date return of 26.18%, outperforming the S&P 500's 12.22%, but the longer-term returns reveal a stark contrast, with a 10-year return of 89.91% compared to the S&P 500's 231.64%. This indicates that while the company has had some short-term success, its valuation does not align with its long-term growth potential.