Is Otter Tail Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Otter Tail Corp. moved from fair to attractive, indicating a positive shift in its perceived value. The company appears undervalued based on its current metrics, with a P/E ratio of 11, an EV to EBITDA of 8.32, and a Price to Book Value of 1.88, all of which suggest that the stock is trading at a discount compared to its earnings and assets. In comparison, Pinnacle West Capital Corp. has a significantly higher P/E of 24.26, while The AES Corp. shows a P/E of 25.28, highlighting Otter Tail's relative attractiveness in the sector.
Despite a mixed performance in the short term, with a year-to-date return of 4.65% compared to the S&P 500's 13.30%, Otter Tail has demonstrated resilience with a 5-year return of 99.00%, outpacing the S&P 500's 91.29%. This performance, combined with its attractive valuation ratios, reinforces the conclusion that Otter Tail Corp. is currently undervalued in the market.