Is Stepan Co. overvalued or undervalued?
As of June 13, 2025, Stepan Co. is considered very attractive and undervalued, with a P/E ratio of 26, an EV to EBITDA ratio of 10.60, and key ratios indicating potential upside despite recent underperformance against the S&P 500.
As of 13 June 2025, the valuation grade for Stepan Co. has moved from attractive to very attractive. Based on the analysis, the company appears to be undervalued. The P/E ratio stands at 26, which is significantly higher than peers such as Cabot Corp. at 8.37 and Quaker Houghton at 18.97. Additionally, the EV to EBITDA ratio for Stepan Co. is 10.60, compared to Cabot Corp.'s 6.36, indicating a premium valuation relative to its peers.Key ratios for Stepan Co. include a Price to Book Value of 1.23 and a PEG Ratio of 2.53. The company's ROCE is 4.45% and ROE is 4.68%, which are relatively low compared to industry standards. Despite recent underperformance against the S&P 500, with a YTD return of -15.32% versus 2.44% for the index, the current valuation metrics suggest that Stepan Co. is positioned for potential upside, reinforcing the view that it is undervalued in the current market environment.
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