Is Pinnacle West Capital Corp. overvalued or undervalued?

As of 30 June 2025, the valuation grade for Pinnacle West Capital Corp. has moved from fair to expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 21, which is lower than its peer The AES Corp. at 25.28, but higher than the industry average, suggesting a premium valuation. Additionally, the EV to EBITDA ratio stands at 10.75, while its peer's ratio is 12.64, further illustrating the relative valuation context.
In terms of returns, Pinnacle West has underperformed compared to the S&P 500 across multiple time frames, with a 1-year return of -4.82% versus the S&P 500's 17.14%. This trend reinforces the notion that the stock may be overvalued, as it struggles to keep pace with broader market performance. Overall, the combination of valuation ratios and recent performance suggests that Pinnacle West Capital Corp. is currently overvalued.