Is Otter Tail Corp. overvalued or undervalued?

As of 3 October 2025, the valuation grade for Otter Tail Corp. has moved from fair to attractive, indicating a positive shift in its perceived value. The company appears to be undervalued, supported by a P/E ratio of 11, which is significantly lower than the peer average of approximately 12.11, and an EV to EBITDA ratio of 8.32, which is also favorable compared to its peers. Additionally, the company boasts a solid ROE of 17.24%, reflecting strong profitability relative to its equity.
In comparison to its peers, Pinnacle West Capital Corp. is considered expensive with a P/E of 24.26, while The AES Corp. is categorized as very attractive with a P/E of 25.28. Despite recent underperformance with a 1-year return of 3.49% compared to the S&P 500's 17.82%, Otter Tail Corp. has shown resilience with a 5-year return of 115.25%, outperforming the S&P 500's 100.56%. This suggests that while the stock may have faced short-term challenges, its long-term potential remains strong.