Otter Tail (OTTR) has just posted its Q1 2026 scorecard, with recent quarterly revenue figures in the US$300 million range and basic EPS of US$1.24 in Q4 2025, backed by trailing 12 month EPS of about US$6.59. Over the past few quarters, the company has seen revenue move from US$338.03 million in Q3 2024 to US$333.04 million in Q2 2025 and US$308.10 million in Q4 2025, while quarterly EPS shifted from US$2.04 to around US$1.86 and then US$1.24. This has set up a results season where investors are focused on how stable margins can offset a softer earnings outlook and modest growth expectations.

See our full analysis for Otter Tail.

With the latest numbers on the table, the next step is to stack these results against the most common stories around Otter Tail, to see which narratives the data supports and which ones look out of sync.

Margins Ease From 22.7% To 21.2%

• Over the last 12 months, net profit margin sat at about 21.2% on roughly US$1.3b of revenue, compared with 22.7% on US$1.3b a year earlier.
• Consensus narrative flags pressure from environmental rules and higher capital spending, and the margin slip lines up with that:
  • Regulatory and environmental costs tied to coal and renewables can add expenses without immediately lifting revenue. This fits with margins edging down while revenue stayed around US$1.3b.
  • A large US$1.4b capital plan and rising interest rates can push up financing and depreciation charges. This is consistent with net income moving from US$301.7 million to US$275.9 million while revenue stayed in the same range.

EPS Trend Softens Against 13.2% History

• Trailing 12 month EPS moved from US$7.30 in Q3 2024 to US$6.59 by Q4 2025, even though five year earnings growth averaged 13.2% per year.
• Bears point to forecasts for a 3.5% yearly decline in earnings, and recent EPS trends give that view some support:
  • Quarterly EPS stepped down from US$2.04 in Q3 2024 to US$1.86 in Q2 2025 and US$1.24 in Q4 2025, which matches concerns about shrinking profit per share.
  • Analysts expect net income to move from US$275.9 million to about US$186.1 million by 2029, and the recent EPS drift lower is more in line with that bearish path than with the prior 13.2% annual growth rate.

On these numbers, skeptics argue the recent EPS slide may be the early stage of the 3.5% annual earnings decline they are watching for, so it can be useful to see how that full cautious case is built out in more detail. 🐻 Otter Tail Bear Case

P/E Discount At 13.5x With 2.6% Yield

• Otter Tail trades on a P/E of 13.5x versus 21.9x for the US electric utilities group and 27.7x for peers, and also offers a 2.6% dividend yield that is not comfortably backed by free cash flow.
• Bulls focus on the lower multiple and long run earnings record, and the data gives that argument some backing but also clear trade offs:
  • Five year earnings growth of 13.2% per year and a net margin of 21.2% help explain why some investors see support at a lower multiple than the 21.9x industry level.
  • At the same time, the 2.6% dividend not being well covered by free cash flow and revenue growth of 4.4% per year versus the market’s 11.2% mean mean that income focused investors still need to weigh the US$88.74 share price against the US$86.50 analyst target.

If you want to see how supporters connect this P/E discount, earnings history and capital plan into a fuller optimistic case, the dedicated bullish narrative is a useful next step. 🐂 Otter Tail Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Otter Tail on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With both risks and rewards in play, the picture is clearly mixed. It makes sense to move quickly, review the full context, and form your own view based on the 2 key rewards and 2 important warning signs.

Explore Alternatives

Otter Tail is facing softer EPS trends, slightly lower margins, and a dividend that is not well covered by free cash flow.

If that mix of earnings pressure and cash flow coverage makes you cautious, it is worth checking stocks in the solid balance sheet and fundamentals stocks screener (45 results).

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.