NRG Energy (NRG) AI Stock Analysis

• Market Cap: $28.34B
• Dividend Yield: 1.19%
• Average Volume (3M): 2.92M
• Price to Earnings (P/E): 23.2
• Beta (1Y): 1.68
• Revenue Growth: 2.57%
• EPS Growth: -10.19%
• Country: US
• Employees: 15,637
• Sector: Utilities
• Sector Strength: 70
• Industry: Independent Power Producers
• EPS (TTM): 2.68
• Shares Outstanding: 195,510,420
• 10 Day Avg. Volume: 2,023,390
• 30 Day Avg. Volume: 2,918,998
• PEG Ratio: 0.82
• Price to Book (P/B): 10.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.74
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 5.19
• Enterprise Value/Ebitda: 2.54
• 1Y Price Target: $175.38
• Price Target Upside: 15.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 71 Outperform
• Price Target: $171.00 ▲(12.69%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

Financial Performance

Recent acquisitions and power portfolio expansions have led the analyst to increase future EBITDA estimates.

Strategic Acquisitions

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

Earnings Potential

There are opportunities for revenue and cost improvements not included in the current guidance, suggesting potential upside.

Guidance and Forecasting

Management's outlook reflects conservatism, suggesting potential for exceeding guidance as opportunities are realized.

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 Business Overview & Revenue Model

Company Description

NRG 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 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	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	4.02B	6.51B	2.55B
EBITDA	3.54B	1.80B	2.98B	4.32B	1.77B
Net Income	1.13B	-202.00M	1.22B	2.19B	510.00M
Balance Sheet
Total Assets	24.02B	26.04B	29.15B	23.18B	14.90B
Cash, Cash Equivalents and Short-Term Investments	974.00M	541.00M	430.00M	250.00M	3.90B
Total Debt	10.99B	10.97B	8.30B	8.29B	9.04B
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	1.82B	-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

• Technical Analysis Sentiment: Positive
• Last Price: 151.75
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 151.75 is below the 20-day moving average (MA) of 153.50, below the 50-day MA of 152.39, and above the 200-day MA of 110.94, indicating a neutral trend. The MACD of -0.51 indicates Positive momentum. The RSI at 50.79 is Neutral, neither overbought nor oversold. The STOCH value of 29.15 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
VST	78 Outperform	$62.48B	28.55	46.29%	0.49%	49.22%	313.49%
PPL	77 Outperform	$25.99B	26.59	7.00%	3.06%	5.62%	30.02%
NRG	71 Outperform	$28.34B	23.21	44.91%	1.19%	2.57%	-10.19%
TXNM	70 Outperform	$5.97B	25.21	8.37%	2.88%	10.10%	149.78%
POR	70 Outperform	$4.46B	14.07	8.33%	5.22%	11.83%	9.53%
EVRG	69 Neutral	$15.58B	17.84	8.95%	3.94%	5.53%	23.00%
Sector *	67 Neutral	$16.78B	17.07	4.47%	3.73%	4.76%	6.06%

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.