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NRG Energy Inc (NRG)
:NRG
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NRG Energy
(NYSE:NRG)
62Neutral
Positive Factors
Earnings Outlook
Management affirmed the earnings per share guidance for the year and projected a growth rate of over 10% annually through 2029.
Partnerships
A partnership with Renew Home and Google Cloud aims to distribute VPP-enabled smart thermostats in Texas, creating an AI-powered VPP, expected to add significant EBITDA by 2030.
Strategic Growth
NRG plans to return $8.8bn of capital to shareholders in 2025-2029 with $1.7bn in dividends and $7.1bn in share repurchases, which should drive EPS growth.
Negative Factors
Acquisitions and Valuation
The valuation of the acquisition is on the higher end, making it an expensive deal compared to market expectations for similar assets.
Cash Flow Concerns
The free cash flow yield from the acquisition is below where NRG shares currently trade, which could be seen unfavorably by investors.
Leverage and Debt
The acquisition will be financed entirely with new debt, increasing the company's leverage and leaving less room for further debt-heavy acquisitions.
NRG Energy (NRG) vs. S&P 500 (SPY)
Market Cap
$23.25B
Dividend Yield1.52%
Average Volume (3M)2.86M
Price to Earnings (P/E)22.9
Beta (1Y)1.37
Revenue Growth-1.72%
EPS GrowthN/A
CountryUS
Employees15,637
SectorUtilities
Sector Strength92
IndustryIndependent Power Producers
Share Statistics
EPS (TTM)5.05
Shares Outstanding203,666,960
10 Day Avg. Volume2,166,239
30 Day Avg. Volume2,858,980
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.23
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit4.74
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$127.43Price Target Upside11.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
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 makes money primarily through the sale of electricity and energy-related services. The company's revenue streams are diversified across power generation and retail electricity sales. In power generation, NRG operates a fleet of power plants and sells electricity on the wholesale market. In its retail business, NRG sells electricity directly to consumers and businesses, offering plans that may include fixed-rate pricing and green energy options. Additionally, NRG generates revenue through energy-related services, which can include energy management solutions, backup power services, and renewable energy products. Strategic partnerships and acquisitions also play a role in NRG's earnings, allowing the company to expand its customer base and service offerings.
NRG Energy Financial Statement Overview
Summary
NRG Energy faces challenges with revenue sustainability and high leverage, which could impact long-term financial health. Despite improvements in net income and cash flow, the company's financial statements reflect a need for stabilization in revenue and leverage management to enhance financial performance and secure growth.Income Statement
The company has demonstrated fluctuating revenue trends with a significant decline in the latest year due to reported revenue of zero, impacting the overall income statement performance. Gross profit margin is not available for the latest year, and previous years show a declining trend. Net income has improved to a positive figure after a loss last year, indicating potential recovery, yet the unsustainable revenue level remains a critical concern. EBIT and EBITDA margins show variability but are relatively strong over the years.40
Negative
Balance Sheet
NRG Energy's balance sheet reveals a high debt-to-equity ratio, reflecting significant leverage which could present financial risk. The equity ratio has decreased, indicating a lower proportion of equity financing relative to total assets. Return on equity is positive but has shown volatility over recent years. The overall financial stability is moderate, with concerns about high leverage persisting.55
Neutral
Cash Flow
Operating cash flow has rebounded strongly, contributing to a positive free cash flow, indicating improved cash generation capabilities. Free cash flow growth is strong, and the cash flow to net income ratios suggest that cash generation from operations is solidly supporting earnings. However, prior negative cash flows highlight potential volatility in cash management.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 28.13B | 28.82B | 31.54B | 26.99B | 9.09B | Gross Profit |
| 6.03B | 2.30B | 4.10B | 6.51B | 2.55B | EBIT |
| 2.42B | 384.00M | 2.02B | 3.34B | 1.10B | EBITDA |
| 3.50B | 1.80B | 2.98B | 4.32B | 1.77B | Net Income Common Stockholders |
| 1.13B | -202.00M | 1.22B | 2.19B | 510.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 199.00M | 541.00M | 430.00M | 250.00M | 3.90B | Total Assets |
| 24.02B | 26.04B | 29.15B | 23.18B | 14.90B | Total Debt |
| 10.99B | 10.97B | 8.30B | 8.29B | 9.04B | Net Debt |
| 10.79B | 10.43B | 7.87B | 8.04B | 5.13B | Total Liabilities |
| 21.54B | 23.13B | 25.32B | 19.58B | 13.22B | Stockholders Equity |
| 2.48B | 2.91B | 3.83B | 3.60B | 1.68B |
| Cash Flow | Free Cash Flow | |||
| 1.83B | -843.00M | -13.00M | 224.00M | 1.61B | Operating Cash Flow |
| 2.31B | -221.00M | 360.00M | 493.00M | 1.84B | Investing Cash Flow |
| -24.00M | -910.00M | -332.00M | -3.04B | -494.00M | Financing Cash Flow |
| -1.75B | -400.00M | 1.04B | -272.00M | 2.20B |
NRG Energy Technical Analysis
Positive
114.14
Price Trends
98.63
Positive
99.10
Positive
91.96
Positive
Market Momentum
3.84
Negative
67.32
Neutral
96.61
Negative
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 114.14 is above the 20-day moving average (MA) of 98.71, above the 50-day MA of 98.63, and above the 200-day MA of 91.96, indicating a bullish trend. The MACD of 3.84 indicates Negative momentum. The RSI at 67.32 is Neutral, neither overbought nor oversold. The STOCH value of 96.61 is Negative, 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 42 risk factors in its most recent earnings report. NRG Energy reported the most risks in the “Production” 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $46.70B | 19.62 | 48.89% | 0.68% | 24.68% | 103.48% | |
75 Outperform | $4.91B | 19.84 | 9.89% | 2.95% | 1.65% | 162.78% | |
73 Outperform | $4.55B | 14.54 | 8.33% | 4.75% | 11.83% | 9.53% | |
72 Outperform | $15.74B | 18.07 | 8.91% | 3.79% | 5.73% | 19.34% | |
69 Neutral | $26.67B | 30.13 | 6.33% | 2.86% | 1.80% | 19.78% | |
63 Neutral | $8.48B | 11.92 | 6.36% | 4.35% | 3.15% | -10.41% | |
62 Neutral | $23.25B | 22.87 | 41.79% | 1.52% | -1.72% | ― |
* Utilities Sector Average
Performance Comparison
NRG
NRG Energy
114.14
38.58
51.06%
TXNM
TXNM Energy
53.02
16.52
45.26%
POR
Portland GE
41.56
-0.28
-0.67%
PPL
PPL
36.08
8.90
32.74%
VST
Vistra Energy
137.30
56.48
69.88%
EVRG
Evergy
68.43
16.62
32.08%
NRG Energy Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q4-2024)
| % Change Since: 4.16%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
NRG Energy's earnings call highlighted strong financial performance, strategic growth plans, and industry leadership in data center development. While there are challenges related to market constraints and regulatory risks, the overall sentiment is positive due to the company's achievements and future growth prospects.Q4-2024 Updates
Positive Updates
Record Financial Performance
NRG Energy delivered record financial results for 2024, with an adjusted EPS of $6.83, which exceeded the midpoint of the guidance range by 8% and was 45% higher than 2023.
EPS Growth Forecast
NRG expects at least 10% EPS CAGR growth through 2029, driven by key strategic initiatives and market trends.
Strategic Partnerships and Initiatives
NRG established an integrated partnership for new natural gas generation development and signed multiple letters of intent with data center developers.
Strong Business Segment Performance
The company achieved the highest adjusted EBITDA and free cash flow in its history, with notable performance in the East and West segments and increased customer growth in Spartan Oil.
Capital Return and Credit Metrics
NRG returned $1.3 billion to shareholders, increased its dividend by 8%, and achieved investment-grade credit metrics a year ahead of schedule.
Data Center Strategy Execution
NRG is advancing its data center strategy with a planned 5.4 gigawatts of capacity by 2032 and has formed a landmark collaboration with GE Vernova and KeyWitt.
Negative Updates
Texas Weather Impact
Texas experienced lower year-over-year results due to milder weather and the impact of asset sales and planned maintenance.
Market Challenges
Challenges include the limited availability of critical components for new thermal generation and a constrained supply of experienced thermal development teams.
Regulatory and Market Risks
Potential risks from legislative changes and the need for fair allocation of costs in Texas through bills like SB6.
Company Guidance
During NRG Energy's fourth quarter and full year 2024 earnings conference call, the company provided robust guidance, highlighting significant achievements and future growth strategies. NRG exceeded the high end of its raised EPS guidance, delivering an adjusted EPS of $6.83, which was 45% higher than 2023. The company achieved record financial performance, with an adjusted EBITDA of $3.8 billion and $2.1 billion in free cash flow before growth. NRG also outlined a strategy to sustain at least 10% EPS CAGR growth through 2029, supported by $750 million in run rate adjusted EBITDA growth and capital returns of $8.8 billion over the next five years. Key initiatives include the development of 1.5 gigawatts of brownfield projects in Texas, expanding partnerships for new natural gas generation, and signing letters of intent with data center developers. NRG's disciplined capital allocation led to $1.3 billion returned to shareholders and an 8% dividend increase in 2024. The company also reaffirmed its 2025 guidance, emphasizing its capacity to leverage power demand growth, particularly in Texas and PJM, while advancing strategic initiatives and capitalizing on power market trends.NRG Energy Corporate Events
Executive/Board Changes
NRG Energy Announces EVP Rasesh Patel’s Retirement
Neutral
Apr 7, 2025
On April 7, 2025, NRG Energy announced the retirement of Rasesh Patel, Executive Vice President of NRG Consumer, effective May 19, 2025. Patel, who played a crucial role in integrating Vivint and home energy platforms and pioneering a residential virtual power plant offering, will remain in an advisory role to assist with the transition. The company is in the process of finding a successor, expected to be appointed by the end of the second quarter. Patel’s leadership has significantly contributed to NRG’s positioning as a leader in the energy and smart home landscape, and his departure marks a significant transition for the company.
Spark’s Take on NRG Stock
According to Spark, TipRanks’ AI Analyst, (NRG) is a Neutral.
NRG Energy’s overall score reflects a strong earnings call with robust future guidance and strategic initiatives that enhance growth prospects. However, financial performance is moderated by high leverage and revenue sustainability concerns. The technical indicators show a neutral trend, while the valuation is reasonable with a fair P/E ratio and moderate dividend yield.
To see Spark’s full report on (NRG) stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.