Is Westamerica Bancorporation overvalued or undervalued?

As of 30 June 2025, the valuation grade for Westamerica Bancorporation has moved from expensive to fair. Based on the current metrics, the company appears fairly valued. The P/E ratio stands at 10, while the Price to Book Value is 1.38, and the EV to EBIT is 3.77. In comparison to peers, WesBanco, Inc. has a P/E of 17.59, and Trustmark Corp. has a P/E of 11.24, indicating that Westamerica Bancorporation is trading at a lower valuation multiple than some of its peers.
Despite its fair valuation, Westamerica Bancorporation has underperformed relative to the S&P 500 over various periods, with a year-to-date return of -4.54% compared to the index's 12.22%, and a three-year return of -8.46% versus 70.41% for the S&P 500. This underperformance may suggest that while the stock is fairly valued, it faces challenges that could impact its future growth prospects.