Is NorthWestern Corp. overvalued or undervalued?

As of 12 May 2025, the valuation grade for NorthWestern Corp. has moved from attractive to fair, indicating a shift in its perceived value. The company is currently fairly valued based on its financial metrics. Key ratios include a P/E ratio of 14, an EV to EBITDA of 10.82, and a PEG ratio of 0.69, which suggests that the stock is reasonably priced relative to its growth potential.
In comparison to its peers, NorthWestern Corp. has a lower P/E ratio than IDACORP, Inc. at 20.31 and PNM Resources, Inc. at 23.20, both of which are considered expensive. This positions NorthWestern Corp. as a more attractive option within its sector, despite its current fair valuation. Notably, the company's recent stock performance has lagged behind the S&P 500 over the longer term, with a 3-year return of -9.10% compared to the S&P 500's 58.74%, reinforcing the notion that the stock may not be capturing its full potential in the market.