IDACORP (IDA) Faces A Valuation Test, Is 11% Undervalued Enough?
How IDACORP Stock Has Been Performing
IDACORP (IDA) has drawn investor attention after recent trading left the stock about 4% lower over the past month, while total return over the past year remains about 14%.
See our latest analysis for IDACORP.
At a latest share price of US$140.76, IDACORP has seen recent momentum cool, with the 30-day share price return down 4.3%, even as the 1-year total shareholder return sits at about 14%. This points to a stock where long-term holders have still been rewarded.
If today's moves in IDACORP have you thinking about other opportunities in essential infrastructure, it could be a good moment to scan the grid-focused 39 power grid technology and infrastructure stocks
The recent pullback in IDACORP after a stronger 1-year run could be tied to the business or simply to sentiment cooling. To gauge which matters more for you, it helps to look at where the valuation now sits.
Most Popular Narrative: 11% Undervalued
At a last close of $140.76, the most widely followed narrative for IDACORP points to a higher fair value of $158.10, hinging on long term demand and capital investment assumptions.
Robust customer and population growth in IDACORP's service area, combined with significant new large-scale industrial investments (e.g., Micron fabs, data centers), suggests sustained above-average electricity demand well into the 2030s, supporting long-term revenue growth.
See what this demand story assumes for earnings, margins, and future valuation multiples. The narrative ties all three together in a detailed projection path.
The narrative uses a 7.11% discount rate to pull those future cash flows and earnings expectations back to today. This is how it arrives at a fair value around $158.10 per share compared with the current $140.76 price. It also builds in specific expectations for revenue growth, profit margins, and the earnings multiple that might apply several years from now, rather than relying on a single year snapshot.
Result: Fair Value of $158.10 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, IDACORP's story can change quickly if hydro conditions remain unfavorable or if regulators limit recovery of rising grid and generation investment costs.
Find out about the key risks to this IDACORP narrative.
Another View On IDACORP’s Valuation
While the fair value narrative points to IDACORP as about 11% undervalued at US$140.76, the market’s own pricing tells a different story. The stock trades on a P/E of 24x, compared with 20.8x for the US Electric Utilities industry, 23.2x for peers, and a fair ratio of 22.1x. That implies investors are already paying a premium, so is this really a mispricing or just a full price for perceived quality?
For a closer look at how these valuation gaps stack up against sector and peer ranges, take a look at the See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If the mixed signals around IDACORP leave you unsure, this is the moment to look through the details yourself and move quickly. To see where cautious investors and optimistic investors are each focusing, take a close look at the 2 key rewards and 2 important warning signs
Looking for more investment ideas beyond IDACORP?
If IDACORP has sharpened your focus on quality, do not stop here. The next strong idea you find today could be the one you regret missing tomorrow.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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