US Equities Analysis

NRG — NRG Energy

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 3.64%
Profit Margins 0.74%
Return on Equity 6.25%
Return on Assets 2.24%
Free Float 0.21B
Dividend Yield 1.29%
Short Int % Utilisation 3.18%

2.2 Growth

Metric Value
Revenue Growth 19.5%
Free Cash Flow 0.43B
EBITDA 21.83 (Ratio)
Enterprise Value 49.29B
EV/Revenue 1.52
EV/EBITDA 21.83

Revenue growth of 19.5% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -3.74%
Risk / Std Dev (Ann.)* 47.47%
1-Year Price Return* -14.01%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $126.24
52-Week Range $112.50 – $189.96
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $30.71B
Prior annual revenue $28.13B
EBIT $1.88B
Tax rate 23.80%
NOPAT = EBIT × (1 − tax rate) $1.43B
Forecast start-growth basis 9.18%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.43B
Add: depreciation & amortisation $896.00M
Less: capital expenditure -$1.15B
Less/(add): working-capital cash-flow movement -$906.00M
Current unlevered FCFF $270.75M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 9.18% $1.56B $978.27M -$1.25B -$989.19M $295.61M $283.85M
2 7.51% $1.68B $1.05B -$1.27B -$1.06B $391.77M $346.86M
3 5.84% $1.78B $1.11B -$1.27B -$1.13B $492.92M $402.39M
4 4.17% $1.85B $1.16B -$1.24B -$1.17B $595.02M $447.86M
5 2.50% $1.90B $1.19B -$1.19B -$1.20B $693.47M $481.27M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.20
Cost of equity 11.33%
Pre-tax cost of debt 5.37%
WACC 8.46%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $11.93B
Implied terminal EV / EBITDA 3.25x
Terminal value as % of enterprise value 80.21%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $1.96B
Present value of terminal value $7.95B
Indicated enterprise value $9.92B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $9.92B
Less: gross interest-bearing debt $16.62B
Add: cash and equivalents $4.71B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value -$2.00B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 199,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $120.18
DCF indicative value per share -$10.04
Indicative value vs. market price -108.36%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 3/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:43:47.689424 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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