Is Mercantile Bank Corp. overvalued or undervalued?

As of 30 June 2025, the valuation grade for Mercantile Bank Corp. moved from expensive to fair, indicating a more favorable assessment of its stock price. The company appears to be fairly valued, with a P/E ratio of 9, a Price to Book Value of 1.19, and an EV to EBITDA of 10.74. In comparison to peers, Premier Financial Corp. has a P/E of 14.14, while Capital City Bank Group, Inc. boasts a more attractive P/E of 12.81, suggesting that Mercantile Bank Corp. is positioned competitively within its industry.
Despite a fair valuation, Mercantile Bank Corp. has underperformed against the S&P 500 over the past year, returning 6.67% compared to the index's 17.14%. However, it has shown strong performance over the last five years with a return of 145.25%, significantly outpacing the S&P 500's 96.61%. This long-term performance may indicate potential for future growth, aligning with its current fair valuation status.