NRG Energy (NRG) AI Stock Analysis

• Market Cap: $31.58B
• Dividend Yield: 1.09%
• Average Volume (3M): 3.16M
• Price to Earnings (P/E): 24.1
• Beta (1Y): 1.65
• Revenue Growth: 2.57%
• EPS Growth: -10.19%
• Country: US
• Employees: 15,637
• Sector: Utilities
• Sector Strength: 74
• Industry: Independent Power Producers
• EPS (TTM): 2.68
• Shares Outstanding: 195,510,420
• 10 Day Avg. Volume: 3,067,076
• 30 Day Avg. Volume: 3,162,975
• PEG Ratio: 0.85
• Price to Book (P/B): 10.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.13
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 0.35
• Enterprise Value/Gross Profit: 5.32
• Enterprise Value/Ebitda: 2.60
• 1Y Price Target: $169.00
• Price Target Upside: 3.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 71 Outperform
• Price Target: $171.00 ▲(5.12%Upside)

NRG Energy scores well due to strong financial performance and a positive earnings call, indicating robust growth prospects. However, high leverage and technical indicators suggesting overbought conditions moderate the overall score. The valuation is fair, providing some support but also limiting upside potential.

Positive Factors

Acquisition Benefits

NRG Energy is positioned to benefit from the recent LS Power acquisition, which will allow the company to double its asset footprint and increase geographic diversity.

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

Leverage Concerns

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.

Retail Strategy Shift

Post-acquisition, NRG will have increased scale, making it more leveraged to power generation rather than a retail-centric strategy.

NRG Energy Business Overview & Revenue Model

Company Description

NRG Energy, Inc. is a leading integrated power company in the United States, engaged primarily in producing and selling energy and energy services across multiple states. With a diverse portfolio of power-generating facilities, NRG provides electricity and related services to residential, commercial, and industrial customers. The company is known for its focus on sustainable and renewable energy solutions, striving to meet the growing demand for cleaner and more efficient energy sources.

How the Company Makes Money

NRG Energy generates revenue primarily through the sale of electricity and energy-related services. The company's key revenue streams include the generation and retail distribution of power, where it sells electricity directly to consumers and businesses. NRG operates a mix of natural gas, coal, oil, nuclear, and renewable energy facilities, allowing it to maintain a balanced approach to power generation. Additionally, NRG offers energy solutions and services, such as demand response and energy efficiency programs, further contributing to its revenue. The company also benefits from strategic partnerships and acquisitions that enhance its market position and operational capabilities.

NRG Energy Financial Statement Overview

Summary

NRG Energy demonstrates strong revenue growth and profitability with robust margins in the TTM period. The high leverage poses a potential risk, but the company effectively converts income to cash, as seen in its strong cash flow metrics. Overall, the financial health appears solid, albeit with some leverage-induced risk.

Income Statement

The TTM (Trailing-Twelve-Months) gross profit margin is robust at 21.37%, supported by a strong net profit margin of 4.66%. Revenue growth is evident with a 4.10% increase over the previous annual period. EBIT and EBITDA margins are solid, at 9.17% and 12.70%, respectively, indicating efficient operational performance. However, fluctuations in net income in previous years suggest some volatility.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 3.96, signaling significant leverage, which raises risk concerns. Return on equity is strong at 49.10%, indicating effective use of equity. The equity ratio is relatively low at 11.11%, suggesting limited funding from equity.

Cash Flow

Free cash flow has grown by 24.61% in the TTM, indicating strong cash generation. The operating cash flow to net income ratio is favorable at 2.12, showing efficient cash conversion. The free cash flow to net income ratio of 1.66 further underscores the company’s ability to convert income into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.29B	28.13B	28.82B	31.54B	26.99B	9.09B
Gross Profit	7.52B	6.03B	2.30B	4.02B	6.51B	2.55B
EBITDA	3.70B	3.54B	1.80B	2.98B	4.32B	1.77B
Net Income	1.36B	1.13B	-202.00M	1.22B	2.19B	510.00M
Balance Sheet
Total Assets	24.99B	24.02B	26.04B	29.15B	23.18B	14.90B
Cash, Cash Equivalents and Short-Term Investments	693.00M	974.00M	541.00M	430.00M	250.00M	3.90B
Total Debt	10.99B	10.99B	10.97B	8.30B	8.29B	9.04B
Total Liabilities	22.21B	21.54B	23.13B	25.32B	19.58B	13.22B
Stockholders Equity	2.78B	2.48B	2.91B	3.83B	3.60B	1.68B
Cash Flow
Free Cash Flow	2.26B	1.82B	-843.00M	-13.00M	224.00M	1.61B
Operating Cash Flow	2.89B	2.31B	-221.00M	360.00M	493.00M	1.84B
Investing Cash Flow	-66.00M	-24.00M	-910.00M	-332.00M	-3.04B	-494.00M
Financing Cash Flow	-1.93B	-1.75B	-400.00M	1.04B	-272.00M	2.20B

NRG Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 162.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: 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 162.67 is above the 20-day moving average (MA) of 154.70, above the 50-day MA of 139.63, and above the 200-day MA of 106.10, indicating a bullish trend. The MACD of 4.13 indicates Positive momentum. The RSI at 70.26 is Negative, neither overbought nor oversold. The STOCH value of 74.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NRG.

NRG Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPL	76 Outperform	$24.77B	25.01	7.00%	3.24%	5.62%	30.02%
POR	73 Outperform	$4.38B	13.98	8.33%	5.20%	11.83%	9.53%
VST	73 Outperform	$66.18B	30.59	46.29%	0.47%	49.22%	313.49%
NRG	71 Outperform	$31.58B	24.15	44.91%	1.09%	2.57%	-10.19%
TXNM	70 Outperform	$5.21B	25.02	8.37%	2.89%	10.10%	149.78%
EVRG	69 Neutral	$15.72B	18.00	8.95%	3.90%	5.53%	23.00%
Sector *	63 Neutral	HK$30.24B	8.06	5.37%	6.79%	-3.22%	3.17%

NRG Energy Corporate Events

NRG Energy Announces Major Acquisition Agreement

On May 12, 2025, NRG Energy, Inc. announced a Purchase and Sale Agreement to acquire all equity interests in several companies from affiliates of LS Power Equity Advisors, LLC. The transaction, valued at approximately $12 billion, includes a mix of stock, cash, and debt assumption. The closing is targeted for the first quarter of 2026, subject to regulatory approvals and customary conditions. This acquisition is expected to enhance NRG’s market position and operational capacity, although it is not anticipated to trigger any change of control provisions under the assumed debt.

The most recent analyst rating on (NRG) stock is a Buy with a $110.00 price target. To see the full list of analyst forecasts on NRG Energy stock, see the NRG Stock Forecast page.

NRG Energy Acquires LS Power Assets for $12 Billion

On May 12, 2025, NRG Energy announced a definitive agreement to acquire a portfolio of natural gas generation facilities and a commercial and industrial virtual power plant platform from LS Power for approximately $12 billion. This acquisition will double NRG’s generation capacity, enhance its ability to serve growing energy demand, and is expected to be immediately accretive to its adjusted earnings per share. The transaction strengthens NRG’s market position in the Northeast and Texas, enhances its credit profile, and supports significant capital returns to shareholders.

The most recent analyst rating on (NRG) stock is a Buy with a $110.0000 price target. To see the full list of analyst forecasts on NRG Energy stock, see the NRG Stock Forecast page.

NRG Energy Announces EVP Rasesh Patel’s Retirement

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.