A Look At IDACORP (IDA) Valuation After A Year Of Steady Total Returns

IDACORP (IDA) has drawn attention after its recent share performance, with the stock roughly flat over the past 3 months despite being up about 24.6% over the past year.

See our latest analysis for IDACORP.

With the share price at US$142.65, IDACORP’s 1 year total shareholder return of 24.57% and 5 year total shareholder return of 69.54% point to steady, income driven momentum rather than a sharp rerating, with recent share price moves easing back after that run.

If IDACORP’s mix of regulated power and renewables has you thinking about where else steady infrastructure growth could show up, it may be worth scanning 35 power grid technology and infrastructure stocks

With IDACORP’s track record of steady total returns and a share price sitting near recent highs, the key question is whether the current valuation leaves upside on the table or whether the market is already pricing in future growth.

Most Popular Narrative: 7.7% Undervalued

At a last close of $142.65 versus a narrative fair value of $154.56, IDACORP is framed as modestly undervalued, with that view hinging on how upcoming growth and regulation shape future earnings.

Massive planned capital investments in transmission lines, energy storage, and generation assets, supported by a constructive regulatory environment and recent rate case filings, are set to expand IDACORP's rate base, enhancing regulated returns and long-term earnings growth.

Read the complete narrative.

Curious what sits behind that fair value gap? The narrative leans on sustained revenue increases, firmer margins, and a richer future earnings multiple than many utilities usually carry.

Result: Fair Value of $154.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that story can shift quickly if weather sensitive hydro output weakens, or if regulators push back on recovering rising grid and generation costs.

Find out about the key risks to this IDACORP narrative.

Another View: Cash Flows Point To A Richer Price

While the narrative and analyst targets frame IDACORP as about 7.7% undervalued at $142.65 versus $154.56, the SWS DCF model points the other way, with an estimate of future cash flow value at $109.98, suggesting the stock is trading at a premium to that cash flow view.

This kind of gap between earnings based fair value and cash flow based value puts the spotlight on your own assumptions around growth, discount rates, and how dependable long term cash generation really is for IDACORP.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out IDACORP for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 46 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With that mix of upside potential and flagged concerns, do not leave the story half read. Check the full breakdown of 2 key rewards and 2 important warning signs

Looking for more investment ideas?

If you stop with just one stock, you risk missing other opportunities that might fit your goals even better, so keep your watchlist working for you.

• Spot potential bargains early by scanning 46 high quality undervalued stocks that combine solid fundamentals with prices that may not fully reflect their strengths.
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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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