• Investors may be wondering whether IDACORP at about US$141 per share is offering good value right now, or if the easy money has already been made.
• The stock is up 11.0% year to date and 26.0% over the past year, although it has slipped 1.9% over the last month and inched 0.8% higher over the last week.
• Recent coverage has focused on IDACORP as an established electric utility, with investors weighing regulated earnings, capital needs and its role in regional power infrastructure. That backdrop helps explain why the stock has attracted renewed attention from income focused investors and those looking for defensive exposure.
• Even so, IDACORP currently scores just 1/6 on a basic undervaluation checklist. The next step is to walk through standard valuation methods, then finish with a more complete way to think about what this stock might be worth.

IDACORP scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: IDACORP Dividend Discount Model (DDM) Analysis

The Dividend Discount Model estimates what a stock could be worth by projecting future dividend payments and discounting them back to today, based on an assumed growth rate and required return.

For IDACORP, the model uses an annual dividend per share of about US$3.92, a return on equity of 9.37% and a payout ratio of roughly 60.12%. Dividend growth in the model is capped at 3.54%, slightly below an expected growth figure of about 3.74%. This keeps the assumptions closer to what might be considered sustainable for a regulated utility.

Based on these dividend projections, the DDM output suggests an intrinsic value of about US$110 per share. Compared with the current share price of roughly US$141, this implies the stock is about 28.5% above the model’s estimate of fair value. Under this framework, investors appear to be paying a premium for IDACORP’s income profile and perceived stability.

Result: OVERVALUED

Our Dividend Discount Model (DDM) analysis suggests IDACORP may be overvalued by 28.5%. Discover 49 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: IDACORP Price vs Earnings

The P/E ratio is a useful way to look at profitable companies because it directly links what you pay for the stock to the earnings the business is currently producing. In simple terms, a higher P/E usually reflects higher growth expectations or a lower perceived risk, while a lower P/E can point to more modest growth assumptions or higher risk.

IDACORP trades on a P/E of about 23.6x, compared with an Electric Utilities industry average of roughly 21.6x and a peer average of around 27.2x. Simply Wall St’s proprietary Fair Ratio for IDACORP is about 20.1x, which aims to capture what a more tailored P/E might look like after considering factors such as earnings growth, profit margins, risk profile, industry and market cap.

This Fair Ratio goes a step beyond simple peer or industry comparisons, because it adjusts for company specific traits rather than assuming all utilities deserve the same multiple. With IDACORP trading at 23.6x against an estimated Fair Ratio of 20.1x, the stock currently sits above that tailored benchmark.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your IDACORP Narrative

Earlier the article mentioned that there is an even better way to understand valuation, so this is where Narratives come in. Narratives give you a simple story behind your numbers by linking your view of IDACORP’s business, your forecast for revenue, earnings and margins, and your own fair value into one framework that sits on Simply Wall St’s Community page. It updates automatically as new news or earnings arrive, and helps you compare that Fair Value to the current price to decide whether IDACORP looks attractive or not. One investor might build a Narrative that leans on strong regional growth, electrification trends and a US$153 fair value, while another might focus on hydro exposure, equity issuance and regulatory risk to land closer to US$121, yet both are using the same tool to express very different perspectives.

Do you think there's more to the story for IDACORP? Head over to our Community to see what others are saying!

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.