Is Stepan Co. overvalued or undervalued?

As of 11 September 2025, the valuation grade for Stepan Co. has moved from fair to attractive, indicating a more favorable assessment of its market position. The company appears to be undervalued relative to its peers, with a P/E ratio of 26 compared to NewMarket Corp.'s 16.30 and ChampionX Corp.'s 15.52. Additionally, Stepan Co. has an EV to EBITDA ratio of 10.60, which is higher than the industry average, suggesting it may be trading at a premium despite its attractive valuation grade.
In terms of performance, Stepan Co. has faced significant challenges, with a year-to-date return of -22.87%, contrasting sharply with the S&P 500's positive return of 12.22% during the same period. This underperformance, along with a PEG ratio of 2.53, indicates that while the company may be undervalued, it has not yet translated that valuation into positive market performance. Overall, Stepan Co. is currently considered undervalued in the specialty chemicals sector.