NRG Energy (NRG) AI Stock Analysis

• Market Cap: $31.13B
• Dividend Yield: 1.04%
• Average Volume (3M): 3.45M
• Price to Earnings (P/E): 25.1
• Beta (1Y): 1.62
• Revenue Growth: 2.57%
• EPS Growth: -10.19%
• Country: US
• Employees: 15,637
• Sector: Utilities
• Sector Strength: 83
• Industry: Independent Power Producers
• EPS (TTM): 2.68
• Shares Outstanding: 195,510,420
• 10 Day Avg. Volume: 4,883,564
• 30 Day Avg. Volume: 3,454,585
• PEG Ratio: 0.89
• Price to Book (P/B): 11.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.75
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 6.61
• Enterprise Value/Ebitda: 2.70
• 1Y Price Target: $155.14
• Price Target Upside: -2.55% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

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

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.

Earnings Growth

The acquisition is expected to increase the 5-year adjusted EPS CAGR to at least 14% from at least 10% previously.

Financial Performance

NRG trades at an attractive valuation with a ~12% free cash flow yield, which is cheaper compared to its peers.

Negative Factors

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 Risks

The acquisition will be financed entirely with new debt, increasing the company's leverage and leaving less room for further debt-heavy acquisitions.

Valuation Concerns

The valuation of the acquisition is on the higher end, making it an expensive deal compared to market expectations for similar assets.

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 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 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
6.26B	6.03B	2.30B	4.10B	6.51B	2.55B
	EBIT
2.69B	2.42B	384.00M	2.02B	3.34B	1.10B
	EBITDA
3.72B	3.50B	1.80B	2.98B	4.32B	1.77B
	Net Income Common Stockholders
1.36B	1.13B	-202.00M	1.22B	2.19B	510.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
278.00M	966.00M	541.00M	430.00M	250.00M	3.90B
	Total Assets
25.40B	24.02B	26.04B	29.15B	23.18B	14.90B
	Total Debt
10.88B	10.99B	10.97B	8.30B	8.29B	9.04B
	Net Debt
10.60B	10.03B	10.43B	7.87B	8.04B	5.13B
	Total Liabilities
22.10B	21.54B	23.13B	25.32B	19.58B	13.22B
	Stockholders Equity
3.30B	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: 159.20
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 159.2 is above the 20-day moving average (MA) of 121.73, above the 50-day MA of 105.56, and above the 200-day MA of 95.34, indicating a bullish trend. The MACD of 14.53 indicates Negative momentum. The RSI at 84.19 is Negative, neither overbought nor oversold. The STOCH value of 93.64 is Negative, 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	75 Outperform	$53.15B	24.57	46.29%	0.56%	49.22%	313.49%
POR	72 Outperform	$4.68B	14.94	8.33%	4.68%	11.83%	9.53%
PPL	72 Outperform	$25.77B	26.03	7.00%	3.00%	5.62%	30.02%
NRG	71 Outperform	$31.13B	25.07	44.91%	1.04%	2.57%	-10.19%
TXNM	69 Neutral	$4.90B	23.52	8.37%	3.01%	10.10%	149.78%
EVRG	64 Neutral	$15.40B	17.63	8.95%	3.91%	5.53%	23.00%
Sector *	63 Neutral	$8.53B	10.18	4.66%	4.38%	3.77%	-12.97%

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.

Spark’s Take on NRG Stock

According to Spark, TipRanks’ AI Analyst, NRG is a Neutral.

NRG Energy demonstrates strong growth potential through strategic acquisitions and robust earnings performance, contributing to a positive outlook. However, significant financial leverage and valuation concerns temper the overall score, suggesting a cautious approach in the near term.

To see Spark’s full report on NRG stock, click here.

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.

Spark’s Take on NRG Stock

According to Spark, TipRanks’ AI Analyst, NRG is a Neutral.

NRG Energy’s overall score reflects a stable but cautious outlook due to financial challenges such as high leverage and fluctuating revenue. Strong earnings call performance and strategic growth initiatives bolster future prospects, but valuation and technical indicators suggest moderate growth potential.

To see Spark’s full report on NRG stock, click here.

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.

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.