Is Merchants Bancorp (Indiana) overvalued or undervalued?

As of 7 July 2025, the valuation grade for Merchants Bancorp (Indiana) has moved from expensive to attractive, indicating a shift in market perception. The company appears to be undervalued, with a P/E ratio of 5, significantly lower than peers such as Renasant Corp. at 21.73 and WesBanco, Inc. at 17.59. Additionally, the Price to Book Value stands at 0.69, while the EV to EBITDA ratio is 0.76, both suggesting that the stock is trading at a discount relative to its intrinsic value.
In terms of performance, Merchants Bancorp has had a mixed return profile, with a year-to-date return of -9.51%, contrasting sharply with the S&P 500's gain of 12.22% during the same period. However, over the last five years, the stock has appreciated by 130.55%, outpacing the S&P 500's 96.61% increase, which reinforces the attractiveness of its current valuation.