MGE Energy, Inc.

MGEE

UtilitiesDiversified UtilitiesNASDAQ

$73.83

Market Cap: $2.71B

MGE Energy, Inc. (MGEE) Valuation Summary

Updated Apr 6, 2026 22:27

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$104.47 – $920.03	$193.49	+146.8%
Growth Exit 10Y	$107.23 – $865.92	$191.08	+143.7%
EBITDA Exit 5Y	$105.44 – $244.52	$169.10	+115.7%
EBITDA Exit 10Y	$111.38 – $266.60	$177.33	+126.2%
▸ Trading Multiples
P/E	$78.93 – $86.08	$75.02	-4.3%
EV/EBITDA	$60.34 – $80.48	$67.79	-13.6%
EV/Revenue	$44.27 – $77.42	$54.34	-30.7%
▸ PEG
PEG Fair Value	$31.98 – $31.98	$31.98	-59.2%
▸ Earnings Power Value
Earnings Power Value	$41.50 – $83.02	$57.34	-26.9%
▸ Dividend Discount
Dividend Discount	$28.25 – $81.05	$43.54	-44.5%

Valuation History

DCF Analysis

Fair Value

$193.49

Market Price

$73.83

Upside / Downside

+162.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGE Energy, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 5.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 476, DIO 280). At a 6.3% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $193.49 per share, suggesting MGEE is undervalued by 162.1% at the current price of $73.83.

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	306	313	307	318	335	343
(−) Net Interest	33	34	33	34	36	37
(+) D&A	226	245	261	267	271	278
EBITDA	565	592	602	620	643	659

(−) Tax	39	40	39	40	42	43
(−) CapEx	250	255	250	259	273	280
(−) ΔWC	-153	-2	2	-3	-5	-5
Free Cash Flow (FCFF)	430	300	311	323	332	341

Terminal Value						8,885
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	417	273	267	261	252	6,536

Enterprise Value	8,005
Projection Period	1,470	18.4%
Terminal Value	6,536	81.6%

(−) Current Net Debt	929

Equity Value	7,076
(/) Outstanding Shares	37

Fair Price	$193.49

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$282	$339	$427	$581	$920
5.3%	$203	$231	$269	$323	$407
6.3%	$157	$173	$193	$220	$257
7.3%	$126	$137	$149	$165	$184
8.3%	$104	$112	$120	$130	$142

Current price: $73.83. Green = undervalued, Red = overvalued.

Fair Value

$191.08

Market Price

$73.83

Upside / Downside

+158.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGE Energy, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 476, DIO 280). At a 6.3% WACC with mid-year discounting, the terminal value (68% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $191.08 per share, suggesting MGEE is undervalued by 158.8% at the current price of $73.83.

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	306	313	307	318	335	351	367	382	397	410	420
(−) Net Interest	33	34	33	34	36	38	39	41	43	44	45
(+) D&A	226	245	261	267	271	257	265	273	286	298	306
EBITDA	565	592	602	620	643	646	671	697	725	752	771

(−) Tax	39	40	39	40	42	44	46	48	50	52	53
(−) CapEx	250	255	250	259	273	286	299	311	323	334	342
(−) ΔWC	-153	-2	2	-3	-5	-5	-5	-5	-4	-4	-4
Free Cash Flow (FCFF)	430	300	311	323	332	321	331	342	356	371	380

Terminal Value											9,911
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	417	273	267	261	252	229	222	216	211	207	5,363

Enterprise Value	7,917
Projection Period	2,554	32.3%
Terminal Value	5,363	67.7%

(−) Current Net Debt	929

Equity Value	6,988
(/) Outstanding Shares	37

Fair Price	$191.08

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$291	$342	$421	$560	$866
5.3%	$209	$233	$266	$312	$384
6.3%	$161	$174	$191	$213	$243
7.3%	$129	$138	$148	$160	$175
8.3%	$107	$113	$119	$126	$135

Current price: $73.83. Green = undervalued, Red = overvalued.

Fair Value

$169.11

Market Price

$73.83

Upside / Downside

+129.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGE Energy, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 5.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 476, DIO 280). At a 6.3% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $169.10 per share, suggesting MGEE is undervalued by 129.0% at the current price of $73.83.

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

EV/EBITDA Exit Multiple

11.65x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	306	313	307	318	335	343
(−) Net Interest	33	34	33	34	36	37
(+) D&A	226	245	261	267	271	278
EBITDA	565	592	602	620	643	659

(−) Tax	39	40	39	40	42	—
(−) CapEx	250	255	250	259	273	—
(−) ΔWC	-153	-2	2	-3	-5	—
Free Cash Flow (FCF)	430	300	311	323	332	—

Peers' EBITDA Multiple						11.7x
Terminal Value						7,673
WACC / Discount Rate	6.33%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	417	273	267	261	252	5,644

Enterprise Value	7,114
Projection Period	1,470	20.7%
Terminal Value	5,644	79.3%

(−) Current Net Debt	929
Equity Value	6,185
(÷) Outstanding Shares	37M
Fair Price	$169	+129.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.6x	9.6x	11.6x	13.6x	15.6x
4.3%	$128	$157	$186	$215	$245
5.3%	$122	$150	$177	$205	$233
6.3%	$116	$143	$169	$196	$222
7.3%	$111	$136	$161	$186	$212
8.3%	$105	$130	$154	$178	$202

Current price: $73.83. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$177.35

Market Price

$73.83

Upside / Downside

+140.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGE Energy, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 476, DIO 280). At a 6.3% WACC with mid-year discounting, the terminal value (66% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.7x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $177.33 per share, suggesting MGEE is undervalued by 140.2% at the current price of $73.83.

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

EV/EBITDA Exit Multiple

11.65x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	306	313	307	318	335	351	367	382	397	410	420
(−) Net Interest	33	34	33	34	36	38	39	41	43	44	45
(+) D&A	226	245	261	267	271	257	265	273	286	298	306
EBITDA	565	592	602	620	643	646	671	697	725	752	771

(−) Tax	39	40	39	40	42	44	46	48	50	52	—
(−) CapEx	250	255	250	259	273	286	299	311	323	334	—
(−) ΔWC	-153	-2	2	-3	-5	-5	-5	-5	-4	-4	—
Free Cash Flow (FCF)	430	300	311	323	332	321	331	342	356	371	—

Peers' EBITDA Multiple											11.7x
Terminal Value											8,983
WACC / Discount Rate	6.33%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	417	273	267	261	252	229	222	216	211	207	4,861

Enterprise Value	7,415
Projection Period	2,554	34.4%
Terminal Value	4,861	65.6%

(−) Current Net Debt	929
Equity Value	6,486
(÷) Outstanding Shares	37M
Fair Price	$177	+140.2%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.6x	9.6x	11.6x	13.6x	15.6x
4.3%	$156	$184	$211	$239	$267
5.3%	$143	$168	$194	$219	$244
6.3%	$132	$155	$177	$200	$223
7.3%	$121	$142	$163	$183	$204
8.3%	$111	$130	$149	$168	$187

Current price: $73.83. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$75.02

Market Price

$73.83

Upside / Downside

+1.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), MGE Energy, Inc. (MGEE) has a fair value of $75.02 based on 8 comparable companies in the Diversified Utilities industry.

P/E Valuation — Diversified Utilities

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
MGE Energy, Inc.MGEE	2,700	19.8x	19.8x
Northwestern Energy Group IncNWE	4,185	23.2x	17.9x
Excelerate Energy, Inc.EE	3,848	25.9x	19.7x
Otter Tail CorporationOTTR	3,715	13.5x	16.0x
Avista CorporationAVA	3,372	17.2x	16.1x
Chesapeake Utilities CorporationCPK	3,067	21.5x	19.7x
American States Water CompanyAWR	3,001	22.8x	23.2x
California Water Service GroupCWT	2,724	21.2x	19.7x
Hawaiian Electric Industries, Inc.HE	2,658	21.7x	14.2x
Industry Median		21.6x	18.8x
(*) Profit after tax		136	136
Equity Value		2,932	2,555
(/) Outstanding shares		37	37
Fair Price		$80	$70

Selected Fair Value (avg of trailing + forward)

$75.02

+1.6%

Fair Value

$67.79

Market Price

$73.83

Upside / Downside

-8.2%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), MGE Energy, Inc. (MGEE) has a fair value of $67.79 based on 8 comparable companies in the Diversified Utilities industry.

EV/EBITDA Valuation — Diversified Utilities

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
MGE Energy, Inc.MGEE	2,700	11.9x	12.1x
Northwestern Energy Group IncNWE	4,185	12.7x	12.1x
Excelerate Energy, Inc.EE	3,848	11.3x	8.1x
Otter Tail CorporationOTTR	3,715	9.6x	9.6x
Avista CorporationAVA	3,372	10.3x	10.2x
Chesapeake Utilities CorporationCPK	3,067	12.6x	11.5x
American States Water CompanyAWR	3,001	15.6x	16.3x
California Water Service GroupCWT	2,724	12.0x	11.8x
Hawaiian Electric Industries, Inc.HE	2,658	8.6x	7.4x
Industry Median		11.6x	10.9x
(*) EBITDA		305	301
= Enterprise Value		3,550	3,266
(-) Net Debt		929	929
Equity Value		2,621	2,337
(/) Outstanding shares		37	37
Fair Price		$72	$64

Selected Fair Value (avg of trailing + forward)

$67.79

-8.2%

Fair Value

$54.34

Market Price

$73.83

Upside / Downside

-26.4%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), MGE Energy, Inc. (MGEE) has a fair value of $54.34 based on 8 comparable companies in the Diversified Utilities industry.

EV/Revenue Valuation — Diversified Utilities

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
MGE Energy, Inc.MGEE	2,700	4.9x	4.9x
Northwestern Energy Group IncNWE	4,185	4.6x	4.4x
Excelerate Energy, Inc.EE	3,848	3.9x	2.8x
Otter Tail CorporationOTTR	3,715	3.4x	3.4x
Avista CorporationAVA	3,372	3.4x	3.4x
Chesapeake Utilities CorporationCPK	3,067	5.1x	4.6x
American States Water CompanyAWR	3,001	6.0x	6.2x
California Water Service GroupCWT	2,724	4.3x	4.2x
Hawaiian Electric Industries, Inc.HE	2,658	1.5x	1.3x
Industry Median		4.1x	3.8x
(*) Revenue		744	734
= Enterprise Value		3,029	2,804
(-) Net Debt		929	929
Equity Value		2,099	1,875
(/) Outstanding shares		37	37
Fair Price		$57	$51

Selected Fair Value (avg of trailing + forward)

$54.34

-26.4%

PEG Fair Value

Fair Value

$31.98

Market Price

$73.83

Upside / Downside

-56.7%

Verdict

Overvalued

Using the PEG framework with historical EPS growth of 8.6% plus 2.4% dividend yield, the company has a fair value of $31.98 based on TTM EPS (FY2025) of $3.72. The current PEG ratio is 2.45.

PEG Ratio

2.45Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 21.1 ÷ (6.2% + 2.4%) = 2.45

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateHistorical	6.2%
Dividend Yield	+2.4%
Adjusted Growth (clamped 8–25%)	8.6%
Fair P/E	8.6x
TTM EPS (FY2025)	$3.72
Fair Value	$31.98

Growth Analysis

Forward Growth

No analyst estimates available.

Historical GrowthActive

Year	Net Income	EPS	YoY
FY2021	$105.8M	$2.92	—
FY2022	$111.0M	$3.07	+5.1%
FY2023	$117.7M	$3.25	+5.9%
FY2024	$120.6M	$3.33	+2.5%
FY2025	$135.9M	$3.72	+11.7%

4Y Historical EPS CAGR: 6.2%

Earnings Power Value

Fair Value

$57.34

Market Price

$73.83

Upside / Downside

-22.3%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 6.3% and normalized earnings of $191.7M, the company has a fair value of $57.34 per share. The EPV range is $41.50 – $83.02 based on WACC sensitivity (4.8% – 7.8%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	192	192	192
(/) WACC	7.8%	6.3%	4.8%
Enterprise Value	2,447	3,026	3,965
(-) Net debt	929	929	929
Equity Value	1,518	2,097	3,036
(/) Outstanding shares	37	37	37
Fair Price	$41.50	$57.34	$83.02

Dividend Discount Model

Fair Value

$43.54

Market Price

$73.83

Upside / Downside

-41.0%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 7.4% and projected dividend growth of 5.1%, the fair value is $43.54 per share. The DDM range is $28.25 – $81.05 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$1.85

Dividend Yield

2.36%

Payout Ratio

49.7%

Dividend Coverage

2.01x

DPS CAGR (4Y)5.1%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$1.85	49.7%	+5.3%
2024	$1.75	52.7%	+5.1%
2023	$1.67	51.3%	+5.0%
2022	$1.59	51.8%	+4.9%
2021	$1.51	51.8%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$1.94	5.1%	0.9313	$1.81
2027	$2.04	5.1%	0.8673	$1.77
2028	$2.15	5.1%	0.8077	$1.73
2029	$2.25	5.1%	0.7522	$1.70
2030	$2.37	5.1%	0.7005	$1.66
Terminal Value	$2.43 DPS	2.5%		$34.87

PV of Projected Dividends$8.67

PV of Terminal Value$34.87

Fair Value per Share$43.54

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	3.1%	4.1%	5.1%	6.1%	7.1%
5.4%	$68	$71	$74	$78	$81
6.4%	$50	$52	$55	$57	$60
7.4%	$40	$42	$44	$45	$47
8.4%	$33	$35	$36	$38	$39
9.4%	$28	$29	$31	$32	$33

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

MGE Energy, Inc. (MGEE) Valuation Summary

Updated Apr 6, 2026 22:27

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$104.47 – $920.03	$193.49	+146.8%
Growth Exit 10Y	$107.23 – $865.92	$191.08	+143.7%
EBITDA Exit 5Y	$105.44 – $244.52	$169.10	+115.7%
EBITDA Exit 10Y	$111.38 – $266.60	$177.33	+126.2%
▸ Trading Multiples
P/E	$78.93 – $86.08	$75.02	-4.3%
EV/EBITDA	$60.34 – $80.48	$67.79	-13.6%
EV/Revenue	$44.27 – $77.42	$54.34	-30.7%
▸ PEG
PEG Fair Value	$31.98 – $31.98	$31.98	-59.2%
▸ Earnings Power Value
Earnings Power Value	$41.50 – $83.02	$57.34	-26.9%
▸ Dividend Discount
Dividend Discount	$28.25 – $81.05	$43.54	-44.5%

Valuation History

DCF Analysis

Fair Value

$193.49

Market Price

$73.83

Upside / Downside

+162.1%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	306	313	307	318	335	343
(−) Net Interest	33	34	33	34	36	37
(+) D&A	226	245	261	267	271	278
EBITDA	565	592	602	620	643	659

(−) Tax	39	40	39	40	42	43
(−) CapEx	250	255	250	259	273	280
(−) ΔWC	-153	-2	2	-3	-5	-5
Free Cash Flow (FCFF)	430	300	311	323	332	341

Terminal Value						8,885
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	417	273	267	261	252	6,536

Enterprise Value	8,005
Projection Period	1,470	18.4%
Terminal Value	6,536	81.6%

(−) Current Net Debt	929

Equity Value	7,076
(/) Outstanding Shares	37

Fair Price	$193.49

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$282	$339	$427	$581	$920
5.3%	$203	$231	$269	$323	$407
6.3%	$157	$173	$193	$220	$257
7.3%	$126	$137	$149	$165	$184
8.3%	$104	$112	$120	$130	$142

Current price: $73.83. Green = undervalued, Red = overvalued.

Fair Value

$191.08

Market Price

$73.83

Upside / Downside

+158.8%

Verdict

Undervalued

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	306	313	307	318	335	351	367	382	397	410	420
(−) Net Interest	33	34	33	34	36	38	39	41	43	44	45
(+) D&A	226	245	261	267	271	257	265	273	286	298	306
EBITDA	565	592	602	620	643	646	671	697	725	752	771

(−) Tax	39	40	39	40	42	44	46	48	50	52	53
(−) CapEx	250	255	250	259	273	286	299	311	323	334	342
(−) ΔWC	-153	-2	2	-3	-5	-5	-5	-5	-4	-4	-4
Free Cash Flow (FCFF)	430	300	311	323	332	321	331	342	356	371	380

Terminal Value											9,911
WACC / Discount Rate	6.3%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	417	273	267	261	252	229	222	216	211	207	5,363

Enterprise Value	7,917
Projection Period	2,554	32.3%
Terminal Value	5,363	67.7%

(−) Current Net Debt	929

Equity Value	6,988
(/) Outstanding Shares	37

Fair Price	$191.08

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.3%	$291	$342	$421	$560	$866
5.3%	$209	$233	$266	$312	$384
6.3%	$161	$174	$191	$213	$243
7.3%	$129	$138	$148	$160	$175
8.3%	$107	$113	$119	$126	$135

Current price: $73.83. Green = undervalued, Red = overvalued.

Fair Value

$169.11

Market Price

$73.83

Upside / Downside

+129.1%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGE Energy, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 5.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 476, DIO 280). At a 6.3% WACC with mid-year discounting, the terminal value (79% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $169.10 per share, suggesting MGEE is undervalued by 129.0% at the current price of $73.83.

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

EV/EBITDA Exit Multiple

11.65x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	306	313	307	318	335	343
(−) Net Interest	33	34	33	34	36	37
(+) D&A	226	245	261	267	271	278
EBITDA	565	592	602	620	643	659

(−) Tax	39	40	39	40	42	—
(−) CapEx	250	255	250	259	273	—
(−) ΔWC	-153	-2	2	-3	-5	—
Free Cash Flow (FCF)	430	300	311	323	332	—

Peers' EBITDA Multiple						11.7x
Terminal Value						7,673
WACC / Discount Rate	6.33%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	417	273	267	261	252	5,644

Enterprise Value	7,114
Projection Period	1,470	20.7%
Terminal Value	5,644	79.3%

(−) Current Net Debt	929
Equity Value	6,185
(÷) Outstanding Shares	37M
Fair Price	$169	+129.1%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.6x	9.6x	11.6x	13.6x	15.6x
4.3%	$128	$157	$186	$215	$245
5.3%	$122	$150	$177	$205	$233
6.3%	$116	$143	$169	$196	$222
7.3%	$111	$136	$161	$186	$212
8.3%	$105	$130	$154	$178	$202

Current price: $73.83. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$177.35

Market Price

$73.83

Upside / Downside

+140.2%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project MGE Energy, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 2.9% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 476, DIO 280). At a 6.3% WACC with mid-year discounting, the terminal value (66% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.7x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $177.33 per share, suggesting MGEE is undervalued by 140.2% at the current price of $73.83.

FCFF Present Value Calculation

WACC

6.33%

3% – 20%

EV/EBITDA Exit Multiple

11.65x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	306	313	307	318	335	351	367	382	397	410	420
(−) Net Interest	33	34	33	34	36	38	39	41	43	44	45
(+) D&A	226	245	261	267	271	257	265	273	286	298	306
EBITDA	565	592	602	620	643	646	671	697	725	752	771

(−) Tax	39	40	39	40	42	44	46	48	50	52	—
(−) CapEx	250	255	250	259	273	286	299	311	323	334	—
(−) ΔWC	-153	-2	2	-3	-5	-5	-5	-5	-4	-4	—
Free Cash Flow (FCF)	430	300	311	323	332	321	331	342	356	371	—

Peers' EBITDA Multiple											11.7x
Terminal Value											8,983
WACC / Discount Rate	6.33%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	417	273	267	261	252	229	222	216	211	207	4,861

Enterprise Value	7,415
Projection Period	2,554	34.4%
Terminal Value	4,861	65.6%

(−) Current Net Debt	929
Equity Value	6,486
(÷) Outstanding Shares	37M
Fair Price	$177	+140.2%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	7.6x	9.6x	11.6x	13.6x	15.6x
4.3%	$156	$184	$211	$239	$267
5.3%	$143	$168	$194	$219	$244
6.3%	$132	$155	$177	$200	$223
7.3%	$121	$142	$163	$183	$204
8.3%	$111	$130	$149	$168	$187

Current price: $73.83. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$75.02

Market Price

$73.83

Upside / Downside

+1.6%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), MGE Energy, Inc. (MGEE) has a fair value of $75.02 based on 8 comparable companies in the Diversified Utilities industry.

P/E Valuation — Diversified Utilities

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
MGE Energy, Inc.MGEE	2,700	19.8x	19.8x
Northwestern Energy Group IncNWE	4,185	23.2x	17.9x
Excelerate Energy, Inc.EE	3,848	25.9x	19.7x
Otter Tail CorporationOTTR	3,715	13.5x	16.0x
Avista CorporationAVA	3,372	17.2x	16.1x
Chesapeake Utilities CorporationCPK	3,067	21.5x	19.7x
American States Water CompanyAWR	3,001	22.8x	23.2x
California Water Service GroupCWT	2,724	21.2x	19.7x
Hawaiian Electric Industries, Inc.HE	2,658	21.7x	14.2x
Industry Median		21.6x	18.8x
(*) Profit after tax		136	136
Equity Value		2,932	2,555
(/) Outstanding shares		37	37
Fair Price		$80	$70

Selected Fair Value (avg of trailing + forward)

$75.02

+1.6%

Fair Value

$67.79

Market Price

$73.83

Upside / Downside

-8.2%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), MGE Energy, Inc. (MGEE) has a fair value of $67.79 based on 8 comparable companies in the Diversified Utilities industry.

EV/EBITDA Valuation — Diversified Utilities

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
MGE Energy, Inc.MGEE	2,700	11.9x	12.1x
Northwestern Energy Group IncNWE	4,185	12.7x	12.1x
Excelerate Energy, Inc.EE	3,848	11.3x	8.1x
Otter Tail CorporationOTTR	3,715	9.6x	9.6x
Avista CorporationAVA	3,372	10.3x	10.2x
Chesapeake Utilities CorporationCPK	3,067	12.6x	11.5x
American States Water CompanyAWR	3,001	15.6x	16.3x
California Water Service GroupCWT	2,724	12.0x	11.8x
Hawaiian Electric Industries, Inc.HE	2,658	8.6x	7.4x
Industry Median		11.6x	10.9x
(*) EBITDA		305	301
= Enterprise Value		3,550	3,266
(-) Net Debt		929	929
Equity Value		2,621	2,337
(/) Outstanding shares		37	37
Fair Price		$72	$64

Selected Fair Value (avg of trailing + forward)

$67.79

-8.2%

Fair Value

$54.34

Market Price

$73.83

Upside / Downside

-26.4%

Verdict

Overvalued

Using the industry peer median EV/Revenue multiple (trailing + forward), MGE Energy, Inc. (MGEE) has a fair value of $54.34 based on 8 comparable companies in the Diversified Utilities industry.

EV/Revenue Valuation — Diversified Utilities

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
MGE Energy, Inc.MGEE	2,700	4.9x	4.9x
Northwestern Energy Group IncNWE	4,185	4.6x	4.4x
Excelerate Energy, Inc.EE	3,848	3.9x	2.8x
Otter Tail CorporationOTTR	3,715	3.4x	3.4x
Avista CorporationAVA	3,372	3.4x	3.4x
Chesapeake Utilities CorporationCPK	3,067	5.1x	4.6x
American States Water CompanyAWR	3,001	6.0x	6.2x
California Water Service GroupCWT	2,724	4.3x	4.2x
Hawaiian Electric Industries, Inc.HE	2,658	1.5x	1.3x
Industry Median		4.1x	3.8x
(*) Revenue		744	734
= Enterprise Value		3,029	2,804
(-) Net Debt		929	929
Equity Value		2,099	1,875
(/) Outstanding shares		37	37
Fair Price		$57	$51

Selected Fair Value (avg of trailing + forward)

$54.34

-26.4%

PEG Fair Value

Fair Value

$31.98

Market Price

$73.83

Upside / Downside

-56.7%

Verdict

Overvalued

Using the PEG framework with historical EPS growth of 8.6% plus 2.4% dividend yield, the company has a fair value of $31.98 based on TTM EPS (FY2025) of $3.72. The current PEG ratio is 2.45.

PEG Ratio

2.45Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 21.1 ÷ (6.2% + 2.4%) = 2.45

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateHistorical	6.2%
Dividend Yield	+2.4%
Adjusted Growth (clamped 8–25%)	8.6%
Fair P/E	8.6x
TTM EPS (FY2025)	$3.72
Fair Value	$31.98

Growth Analysis

Forward Growth

No analyst estimates available.

Historical GrowthActive

Year	Net Income	EPS	YoY
FY2021	$105.8M	$2.92	—
FY2022	$111.0M	$3.07	+5.1%
FY2023	$117.7M	$3.25	+5.9%
FY2024	$120.6M	$3.33	+2.5%
FY2025	$135.9M	$3.72	+11.7%

4Y Historical EPS CAGR: 6.2%

Earnings Power Value

Fair Value

$57.34

Market Price

$73.83

Upside / Downside

-22.3%

Verdict

Overvalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	192	192	192
(/) WACC	7.8%	6.3%	4.8%
Enterprise Value	2,447	3,026	3,965
(-) Net debt	929	929	929
Equity Value	1,518	2,097	3,036
(/) Outstanding shares	37	37	37
Fair Price	$41.50	$57.34	$83.02

Dividend Discount Model

Fair Value

$43.54

Market Price

$73.83

Upside / Downside

-41.0%

Verdict

Overvalued

Dividend Profile

Current DPS

$1.85

Dividend Yield

2.36%

Payout Ratio

49.7%

Dividend Coverage

2.01x

DPS CAGR (4Y)5.1%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$1.85	49.7%	+5.3%
2024	$1.75	52.7%	+5.1%
2023	$1.67	51.3%	+5.0%
2022	$1.59	51.8%	+4.9%
2021	$1.51	51.8%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$1.94	5.1%	0.9313	$1.81
2027	$2.04	5.1%	0.8673	$1.77
2028	$2.15	5.1%	0.8077	$1.73
2029	$2.25	5.1%	0.7522	$1.70
2030	$2.37	5.1%	0.7005	$1.66
Terminal Value	$2.43 DPS	2.5%		$34.87

PV of Projected Dividends$8.67

PV of Terminal Value$34.87

Fair Value per Share$43.54

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	3.1%	4.1%	5.1%	6.1%	7.1%
5.4%	$68	$71	$74	$78	$81
6.4%	$50	$52	$55	$57	$60
7.4%	$40	$42	$44	$45	$47
8.4%	$33	$35	$36	$38	$39
9.4%	$28	$29	$31	$32	$33