Is NiSource, Inc. overvalued or undervalued?

As of 12 February 2025, the valuation grade for NiSource, Inc. has moved from very expensive to expensive. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 19, while the industry average P/E is higher at approximately 21.29, indicating that NiSource is trading at a premium compared to its peers. Additionally, the EV to EBITDA ratio is 12.30, which is in line with its P/E but suggests limited upside potential when compared to Atmos Energy Corp., which has a higher EV to EBITDA of 14.61.
In terms of profitability, NiSource's ROE is 10.95%, which is decent, but the ROCE of 6.99% indicates that capital is not being utilized as effectively as it could be. The PEG ratio of 0.73 suggests that the stock may be undervalued relative to its growth expectations, but this is countered by its expensive valuation grade. Notably, NiSource has outperformed the S&P 500 with a 1-year return of 43.04% compared to the index's 10.26%, which may have contributed to its current elevated valuation. Overall, the combination of these factors leads to the conclusion that NiSource is overvalued in the current market environment.