NRG Energy (NRG) AI Stock Analysis

• Market Cap: $31.79B
• Dividend Yield: 1.05%
• Average Volume (3M): 2.28M
• Price to Earnings (P/E): 69.6
• Beta (1Y): 1.61
• Revenue Growth: 2.09%
• EPS Growth: -74.13%
• Country: US
• Employees: 15,637
• Sector: Utilities
• Sector Strength: 65
• Industry: Independent Power Producers
• EPS (TTM): 1.68
• Shares Outstanding: 193,430,800
• 10 Day Avg. Volume: 2,606,379
• 30 Day Avg. Volume: 2,275,025
• PEG Ratio: -0.03
• Price to Book (P/B): 7.50
• Price to Sales (P/S): 0.66
• P/FCF Ratio: 10.13
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 1.47
• Enterprise Value/Gross Profit: 8.49
• Enterprise Value/Ebitda: 16.81
• 1Y Price Target: $232.00
• Price Target Upside: 41.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 58 Neutral
• Price Target: $153.00 ▼(-6.91% Downside)

NRG Energy's overall stock score reflects a mixed financial performance with strong revenue growth but declining profitability and high leverage. Technical indicators suggest bearish momentum, while valuation metrics indicate potential overvaluation. The positive sentiment from the earnings call, with strategic initiatives and strong EPS growth, provides some optimism.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective market penetration and demand for NRG's energy solutions, supporting long-term business expansion.

Strategic Agreements

Long-term agreements with data centers enhance NRG's market position and ensure stable future revenue streams, supporting strategic growth.

Virtual Power Plant Expansion

Expansion of the virtual power plant initiative reflects NRG's innovation in energy management, enhancing its competitive edge in renewable energy.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase risk, potentially impacting NRG's ability to invest in growth opportunities.

Profitability Challenges

Declining profitability margins suggest cost pressures and operational inefficiencies, which could hinder long-term financial performance.

Cash Flow Decline

Declining cash flow growth indicates potential liquidity issues, affecting NRG's ability to fund operations and strategic investments.

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 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 Financial Statement Overview

Summary

NRG Energy's financial performance is mixed. While revenue growth is strong at 24.2%, profitability margins have declined, with a net profit margin of 1.78%. High leverage is evident with a debt-to-equity ratio of 4.86, and cash flow challenges are present with a 38.71% decline in free cash flow growth.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.37B	28.13B	28.82B	31.54B	26.99B	9.09B
Gross Profit	5.07B	6.03B	2.30B	4.10B	6.51B	2.55B
EBITDA	2.56B	3.50B	1.75B	2.80B	4.18B	1.72B
Net Income	522.00M	1.13B	-202.00M	1.22B	2.19B	510.00M
Balance Sheet
Total Assets	24.09B	24.02B	26.04B	29.15B	23.18B	14.90B
Cash, Cash Equivalents and Short-Term Investments	180.00M	966.00M	541.00M	430.00M	250.00M	3.90B
Total Debt	11.12B	10.99B	10.97B	8.30B	8.29B	9.04B
Total Liabilities	21.80B	21.54B	23.13B	25.32B	19.58B	13.22B
Stockholders Equity	2.29B	2.48B	2.91B	3.83B	3.60B	1.68B
Cash Flow
Free Cash Flow	1.39B	1.83B	-819.00M	-7.00M	224.00M	1.61B
Operating Cash Flow	2.29B	2.31B	-221.00M	360.00M	493.00M	1.84B
Investing Cash Flow	-905.00M	-24.00M	-910.00M	-332.00M	-3.04B	-494.00M
Financing Cash Flow	-1.82B	-1.75B	-400.00M	1.04B	-272.00M	2.20B

NRG Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 164.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 164.36 is above the 20-day moving average (MA) of 153.67, above the 50-day MA of 154.41, and above the 200-day MA of 124.59, indicating a bullish trend. The MACD of 3.54 indicates Negative momentum. The RSI at 63.93 is Neutral, neither overbought nor oversold. The STOCH value of 80.37 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	77 Outperform	71.59B	33.52	47.74%	0.42%	46.90%	388.66%
FE	73 Outperform	24.95B	19.07	10.18%	4.03%	6.44%	49.07%
DTE	70 Neutral	28.16B	19.52	12.31%	3.21%	14.35%	3.62%
CNP	67 Neutral	24.82B	26.50	8.49%	2.29%	4.84%	-11.24%
PPL	67 Neutral	26.39B	26.83	6.92%	3.01%	6.62%	17.35%
NRG	58 Neutral	$31.79B	69.55	17.66%	1.05%	2.09%	-74.13%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

NRG Energy Corporate Events

NRG Energy Secures $1 Billion Term Loan Facility

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.