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Nrg Energy (NRG)
NYSE:NRG
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NRG Energy (NRG) AI Stock Analysis

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NRG

NRG Energy

(NYSE:NRG)

Rating:58Neutral
Price Target:
$154.00
â–²(3.97% Upside)
NRG Energy's overall stock score reflects a mixed financial performance with strong revenue growth but declining profitability margins and high leverage. Technical analysis suggests bearish trends, while the earnings call provides a positive outlook with strategic achievements. Valuation concerns due to a high P/E ratio also weigh on the score.
Positive Factors
Acquisitions
The acquisition of 13GW power plants and 6GW C&I demand response from LS Power transforms NRG Energy into a more balanced generation company, addressing concerns about being short on power.
Financial Performance
Recent acquisitions and power portfolio expansions have led the analyst to increase future EBITDA estimates.
Valuation
NRG Energy's valuation is attractive, trading at approximately 7.5x EV/EBITDA with a 12% free cash flow yield, which is considered reasonable compared to peers.
Negative Factors
Debt and Leverage
Management increased target leverage to less than 3.0x, seeing an enhanced credit profile for the combined company due to the assets' physical attributes, earnings diversity, and greater scale.
Market Pricing
Analyst believes there is room for further growth as the market is not fully pricing in the value creation from potential hyperscaler deals.

NRG Energy (NRG) vs. SPDR S&P 500 ETF (SPY)

NRG Energy Business Overview & Revenue Model

Company DescriptionNRG Energy, Inc., together with its subsidiaries, operates as an integrated power company in the United States. It operates through Texas, East, and West. The company is involved in the producing, selling, and delivering electricity and related products and services to approximately 6 million residential, commercial, industrial, and wholesale customers. It generates electricity using natural gas, coal, oil, solar, nuclear, and battery storage. The company also provides system power, distributed generation, renewable products, backup generation, storage and distributed solar, demand response, and energy efficiency, and advisory services, as well as carbon management and specialty services; and on-site energy solutions. In addition, it trades in electric power, natural gas, and related commodities; environmental products; weather products; and financial products, including forwards, futures, options, and swaps. Further, the company procures fuels; provides transportation services; and directly sells energy, services, and products and services to retail customers under the NRG, Reliant, Direct Energy, Green Mountain Energy, Stream, and XOOM Energy. As of December 31, 2021, it owns and leases power generation portfolio with approximately 18,000 megawatts of capacity at 25 plants. NRG Energy, Inc. was founded in 1989 and is headquartered in Houston, Texas.
How the Company Makes MoneyNRG Energy generates revenue primarily through the sale of electricity and gas, with its Generation segment contributing significantly to earnings by operating a diverse fleet of power plants, including natural gas, coal, solar, and wind facilities. Revenue is obtained by selling electricity to wholesale markets and directly to retail customers. In the Retail segment, NRG earns revenue by providing electricity and gas services to residential, commercial, and industrial customers, often through fixed-rate and variable-rate pricing plans. Additionally, the company engages in energy service offerings like demand response and energy efficiency programs. Strategic partnerships and acquisitions, along with a focus on expanding its renewable energy portfolio, also play a crucial role in enhancing revenue streams and market presence.

NRG Energy Key Performance Indicators (KPIs)

Any
Any
Net Income by Segment
Net Income by Segment
Chart Insights
Data provided by:Main Street Data

NRG Energy Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
NRG Energy's earnings call presented a predominantly positive outlook, with strong financial performance and strategic achievements, such as long-term agreements and expansion in key markets. Despite some challenges related to past asset sales and integration complexities, the overall sentiment is optimistic, supported by record earnings and growth initiatives.
Q2-2025 Updates
Positive Updates
Strong Second Quarter Results
NRG Energy delivered strong second quarter results with an adjusted EPS of $1.73, reflecting an 8% growth year-over-year when normalized for asset sales and retirements. For the first half of 2025, adjusted EPS was $4.42, representing an increase of 48% on the same basis.
Long-term Retail Power Agreements
NRG announced long-term retail power agreements with a data center operator for 295 megawatts, with potential growth to 1 gigawatt, validating their strategy and providing evidence of growing interest in gas-fired power for data centers.
Texas Residential Virtual Power Plant
The Texas Residential Virtual Power Plant exceeded expectations, leading NRG to increase their 2025 target by more than sevenfold, from 20 megawatts to 150 megawatts of curtailable capacity.
Record Smart Home Retention
The Smart Home business achieved record customer retention at over 90% and continues to see consistent customer growth, expansion to its recurring service margins.
Exceptional Financial Performance
NRG recorded the highest adjusted earnings in the company's history through the first half of 2025 with over $2.35 billion of adjusted EBITDA, a year-over-year increase of 40% and 11%, respectively.
Acquisition and Expansion
NRG announced the acquisition of a 13-gigawatt natural gas generation portfolio and a 6-gigawatt commercial and industrial virtual power plant platform from LS Power, expanding their footprint in PJM and ERCOT.
Free Cash Flow Growth
Free cash flow before growth was $1.207 billion in the first half of 2025, a year-over-year increase driven by adjusted EBITDA growth and the timing of working capital items.
Negative Updates
Adjusted EBITDA and Net Income Decline
Adjusted EBITDA and adjusted net income for the quarter were down year-over-year, primarily due to the absence of earnings from the Airtron sale in 2024, expiration of the Cottonwood lease, deactivation of Indian River Unit 4, and higher phantom stock expense.
Challenges in Asset Integration
The integration of acquired assets and the pending LS Power acquisition are complex and may affect future performance and timelines.
Company Guidance
During the NRG Energy second quarter earnings call, the company reaffirmed its full-year financial guidance across all key metrics, with current trends at the high end of the projected ranges. The call highlighted the announcement of long-term retail power agreements with a data center operator for 295 megawatts, potentially increasing to 1 gigawatt, emphasizing a strategic focus on gas-fired power for data centers. The T.H. Wharton project is progressing towards a mid-2026 completion, with construction well underway. The Texas Residential Virtual Power Plant's initial results have outperformed expectations, leading to a revised 2025 target of 150 megawatts, more than sevenfold the previous target. Financially, NRG reported adjusted earnings per share of $1.73 for the second quarter, reflecting an 8% year-over-year growth when normalized for asset sales and retirements. For the first half of 2025, adjusted EPS was $4.42, marking a 48% increase. The company also reported $909 million in adjusted EBITDA for the quarter, with a free cash flow before growth of $914 million.

NRG Energy Financial Statement Overview

Summary
NRG Energy's financial performance is mixed. Strong revenue growth is overshadowed by declining profitability margins and high leverage. The balance sheet shows significant financial risk due to high debt levels, and cash flow challenges are evident with declining free cash flow growth.
Income Statement
65
Positive
NRG Energy shows a mixed performance in its income statement. The TTM data reveals a gross profit margin of 17.01%, which is a decline from previous years, indicating pressure on cost management. The net profit margin has also decreased to 1.78%, reflecting challenges in maintaining profitability. However, the revenue growth rate of 24.2% in the TTM period is a positive indicator of top-line expansion. Despite this, EBIT and EBITDA margins have decreased, suggesting operational inefficiencies.
Balance Sheet
55
Neutral
The balance sheet indicates a high debt-to-equity ratio of 4.86 in the TTM period, highlighting significant leverage and potential financial risk. Return on equity has decreased to 20.75% from higher levels in previous years, reflecting reduced profitability for shareholders. The equity ratio stands at 9.5%, indicating a low proportion of equity financing relative to total assets, which may pose risks in volatile market conditions.
Cash Flow
50
Neutral
NRG Energy's cash flow statement shows a decline in free cash flow growth by 38.71% in the TTM period, signaling potential liquidity challenges. The operating cash flow to net income ratio is 0.26, suggesting that operating cash flow is not sufficiently covering net income. The free cash flow to net income ratio of 0.61 indicates moderate cash generation relative to net income, but the declining trend is concerning.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue29.36B28.13B28.82B31.54B26.99B9.09B
Gross Profit5.00B6.03B2.30B4.02B6.51B2.55B
EBITDA2.60B3.50B1.80B2.98B4.32B1.77B
Net Income522.00M1.13B-202.00M1.22B2.19B510.00M
Balance Sheet
Total Assets24.09B24.02B26.04B29.15B23.18B14.90B
Cash, Cash Equivalents and Short-Term Investments180.00M966.00M541.00M430.00M250.00M3.90B
Total Debt11.12B10.99B10.97B8.30B8.29B9.04B
Total Liabilities21.80B21.54B23.13B25.32B19.58B13.22B
Stockholders Equity2.29B2.48B2.91B3.83B3.60B1.68B
Cash Flow
Free Cash Flow1.39B1.83B-819.00M-7.00M224.00M1.61B
Operating Cash Flow2.29B2.31B-221.00M360.00M493.00M1.84B
Investing Cash Flow-905.00M-24.00M-910.00M-332.00M-3.04B-494.00M
Financing Cash Flow-1.82B-1.75B-400.00M1.04B-272.00M2.20B

NRG Energy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price148.12
Price Trends
50DMA
154.13
Negative
100DMA
141.59
Positive
200DMA
119.69
Positive
Market Momentum
MACD
-2.67
Positive
RSI
44.38
Neutral
STOCH
22.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NRG, the sentiment is Positive. The current price of 148.12 is below the 20-day moving average (MA) of 153.89, below the 50-day MA of 154.13, and above the 200-day MA of 119.69, indicating a neutral trend. The MACD of -2.67 indicates Positive momentum. The RSI at 44.38 is Neutral, neither overbought nor oversold. The STOCH value of 22.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NRG.

NRG Energy Risk Analysis

NRG Energy disclosed 46 risk factors in its most recent earnings report. NRG Energy reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

NRG Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$66.11B30.1645.85%0.46%46.90%388.66%
73
Outperform
$25.17B19.2610.33%3.99%6.44%49.07%
71
Outperform
$28.67B19.9212.61%3.10%14.35%3.62%
71
Outperform
$27.01B27.456.96%2.90%6.62%17.35%
67
Neutral
$24.61B26.278.76%2.31%4.84%-11.24%
67
Neutral
$17.66B18.135.33%3.62%7.33%12.21%
58
Neutral
$28.29B61.2617.66%1.17%2.09%-74.13%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NRG
NRG Energy
148.12
66.77
82.08%
CNP
Centerpoint Energy
37.73
11.32
42.86%
DTE
DTE Energy
138.41
17.91
14.86%
FE
FirstEnergy
43.77
1.94
4.64%
PPL
PPL
36.62
5.87
19.09%
VST
Vistra Energy
194.60
110.52
131.45%

NRG Energy Corporate Events

Private Placements and Financing
NRG Energy Secures $1 Billion Term Loan Facility
Neutral
Jul 25, 2025

On July 22, 2025, NRG Energy, Inc. amended its Second Amended and Restated Credit Agreement by entering into a Fifteenth Amendment with Citicorp North America, Inc. and other financial institutions. This amendment introduced a new Incremental Term Loan B Facility worth $1 billion, which is integrated with the company’s existing term loan B facility. The loan, secured by the company’s and its subsidiaries’ assets, carries a maturity date of April 16, 2031, and includes various covenants and conditions typical for such financial arrangements. This move is likely to impact NRG Energy’s financial operations by providing additional liquidity and potentially affecting its leverage and investment strategies.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 28, 2025