NRG Energy, Inc. (NRG) stock analysis

P/E above its 5-year median

NRG Energy's P/E of 17.2 is above its own 5-year median of 14.5.

P/E below the industry

NRG Energy's P/E of 17.2 is below the Electric Services median of 20.9.

EV/EBITDA above its 5-year median

NRG Energy's EV/EBITDA of 9.6 is above its 5-year median of 7.6.

P/S below the industry

NRG Energy's price-to-sales of 0.59 is below the Electric Services median of 2.77 (book value is negative, so we use sales).

Trading below fair value

The share price of $97.50 is below our fair value estimate of $101.84.

Margin of safety under 20%

The price is 4.3% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -0.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -8.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -12.7% over the last twelve months, against a 5-year average of 11.1% a year.

Growing faster than the industry

Revenue grew 17.4% over the last twelve months; the Electric Services median is 7.8%.

Guidance raised

NRG Energy raised its 2026 Adjusted cash provided by operating activities outlook on Aug 4, 2026.

Gross margin slipping

Gross margin was 20.2% over the last twelve months, against 21.8% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 11.1% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 3.6% over the last twelve months, against a 5-year average of 3.6%.

Net margin below the industry

NRG Energy's net margin of 3.6% is below the Electric Services median of 8.8%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 9.5% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.4 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.99 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.53; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

NRG Energy paid dividends worth 1.5% of the share price over the last twelve months.

Yield below Treasuries

The 1.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; NRG Energy yields 1.5%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.