Is Otter Tail Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Otter Tail Corp. has moved from fair to attractive, indicating a more favorable assessment of its worth. The company appears to be undervalued, particularly when considering its P/E ratio of 11, which is significantly lower than the industry average, and an EV to EBITDA ratio of 8.32, suggesting that it is trading at a discount relative to its earnings potential. Additionally, the company's ROE stands at 17.24%, reflecting strong profitability compared to its peers.
In comparison to its peers, Otter Tail Corp. has a P/E ratio of 12.11, while Pinnacle West Capital Corp. is considered expensive at 24.26, and The AES Corp. is categorized as very attractive with a P/E of 25.28. This positions Otter Tail favorably within the industry. Notably, over the past five years, Otter Tail has delivered a return of 99.00%, which outperformed the S&P 500's return of 91.29%, reinforcing the notion that the stock may be undervalued relative to its performance.