VST
Vistra Corp.Thesis. Vistra is the scaled, diversified way to own the AI data-center power thesis: 44 GW of dispatchable generation, a nuclear/gas base, and freshly signed 20-year hyperscaler contracts with Meta and AWS via the $4B Cogentrix deal. At 14.4x forward earnings and 10.9x EV/EBITDA with 43% revenue growth and a 0.47 PEG, the stock is priced for far less than the secular demand it commands — but a 355% debt/equity load, choppy quarterly EPS and coordinated insider selling near the highs argue for accumulating on weakness rather than chasing.
Scoreboard
VST trades at $155.73, down 29% from its $219.82 52-week high and just 17% off the $132.66 low — sitting at only the 26th percentile of its annual range and below both the 50-day ($154.42) and 200-day ($168.08) moving averages. The $52.5B equity cap sits atop a $74.3B enterprise value, reflecting ~$19.9B of debt. Consensus target of $222.89 (median $225, high $320, low $99) implies 43% upside, and 18 analysts skew strong_buy at a 1.4 recommendation mean — the widest gap between rating and price in the group.
QoQ Changes
Q1 2026 revenue of $5.64B jumped 23% QoQ from $4.58B in Q4 2025, with net income surging to $1.03B from just $233M and EPS printing $2.90 versus a sub-quarter prior. The quarter beat consensus by 112% ($2.87 vs $1.35 estimate), a violent reversal from three prior misses.
Gross margin expanded sharply to ~43% in Q1 2026 ($2.41B on $5.64B) from ~34% in Q4, while operating margin rose to ~27% and EBITDA to $2.17B (~39%) from a depressed $1.28B. Trailing margins remain robust at 38.6% gross, 26.6% operating and 34.9% EBITDA — reflecting favorable power spreads and hedge realization.
FCF margin is thin at 2.45% and FCF yield just 0.9%, a function of heavy generation capex and the Cogentrix outlay rather than weak operations. Free cash conversion is the soft spot in an otherwise strong earnings profile and warrants monitoring as growth capex ramps.
Cash of $658M against $19.9B total debt leaves net debt of ~$19.3B and a 355% debt/equity ratio — high, though typical for a capital-intensive IPP. Liquidity is tight: current ratio 0.896 and quick ratio 0.263, leaving little cushion and making refinancing terms rate-sensitive.
At 14.4x forward P/E, 10.9x EV/EBITDA and 2.7x sales, VST trades at a discount to nuclear-heavy peer Constellation despite comparable AI-power optionality; the 26.3x trailing P/E overstates richness given the depressed 2025 base. A 0.47 PEG against 43% revenue growth flags a valuation that has not caught up to the growth trajectory.
The $4B Cogentrix acquisition and two 20-year power purchase agreements with Meta and Amazon Web Services materially expand VST's contracted, hyperscaler-linked cash flows and de-risk the merchant profile. Management set Q2 2026 results for Aug. 7, 2026 — the next test of whether Q1's beat marks a durable inflection or hedge timing.
Ownership & Insider Activity
SEC Form 4 data shows uniformly bearish insider activity: all discretionary trades in the last 60 days were open-market sales (code S) near the highs, netting -$6.86M with zero purchases. Director Acosta sold 15,000 shares at $165-170 (~$2.5M), director Sult sold 6,500 at $170 ($1.1M), and officer Montemayor trimmed twice at $160-165 ($1.56M) — a coordinated cash-out ahead of the pullback. Institutions own ~91% (BlackRock 8.5%, Vanguard entities ~11% combined), while short interest rose to 5.3% of float (15.4M vs 13.4M shares prior month, 3.04-day cover), a modest bearish tick.
Recent Insider Transactions
| Date | Insider | Position | Shares | Value |
|---|---|---|---|---|
| 2026-06-18 | SULT JOHN R | Director | 6,500 | $1.1M |
| 2026-06-18 | ACOSTA ARCILIA C | Director | 15,000 | $2.5M |
| 2026-06-16 | HELM SCOTT BRADFORD | Director | 25,000 | $4.0M |
| 2026-06-15 | BARBAS PAUL M | Director | 488 | $73.4K |
| 2026-06-02 | MONTEMAYOR MARGARET M. | Officer | 4,600 | $736.0K |
| 2026-05-27 | MONTEMAYOR MARGARET M. | Officer | 5,000 | $824.8K |
Earnings Quality
| Period | Actual EPS | Estimate | Surprise | Surprise % |
|---|---|---|---|---|
| 2026-03-31 Q1 | $2.87 | $1.35 | +$1.52 | +112.18% |
| 2025-12-31 Q4 | $0.54 | $2.37 | $-1.83 | -77.20% |
| 2025-09-30 Q3 | $1.75 | $2.12 | $-0.37 | -17.64% |
| 2025-06-30 Q2 | $0.71 | $1.23 | $-0.52 | -42.47% |
VST beat consensus in only 1 of the last 4 quarters, with an average surprise of -6.3% — a poor headline beat rate that masks a bimodal pattern of large hedge- and weather-driven swings rather than steady execution.
Surprises have been wildly volatile — from -42% (Q2'25) and -77% (Q4'25) to +112% (Q1'26) — evidence that analysts remain badly miscalibrated to VST's commodity-linked earnings, which raises event risk into the Aug. 7 print.
Analyst Action
| Month | Distribution | Strong Buy | Buy | Hold | Sell | Strong Sell |
|---|---|---|---|---|---|---|
| 2026-07 | 7 | 15 | 2 | 0 | 0 | |
| 2026-06 | 6 | 15 | 2 | 0 | 0 | |
| 2026-05 | 6 | 16 | 2 | 0 | 0 | |
| 2026-04 | 6 | 16 | 2 | 0 | 0 |
The Finnhub series shows a slow bullish drift: strong_buy ratings ticked up from 6 to 7 into July while buys held at 15 and holds stayed pinned at 2, with zero sell or strong_sell ratings across the visible window. The bull camp is consolidating even as the price corrects.
Momentum is mildly bullish — ratings are migrating toward strong_buy with no downgrades in the last 15 days, though Morgan Stanley trimmed its target to $210.
Seven Essential Metrics
EBITDA margin 34.9%, operating margin 26.6% and a standout 42.9% ROE, though ROA of 6.0% reflects the asset-heavy base.
Revenue grew 43.4% with Q1'26 net income up 4x QoQ; earnings growth is n/a but the trajectory is inflecting higher.
FCF margin of just 2.45% and 0.9% FCF yield lag peers as growth capex and M&A consume operating cash.
355% debt/equity, ~$19.3B net debt and a 0.896 current ratio leave a thin liquidity cushion.
Beta of 1.41 and commodity-driven earnings volatility offset by scale, diversification and contracted hyperscaler cash flows.
14.4x forward P/E, 10.9x EV/EBITDA, 2.7x sales and a 0.47 PEG understate 43% growth and AI-power optionality.
Vistra has been an aggressive buyback machine, steadily shrinking the share count; exact repurchase figures are n/a in the data.
VST pays a token dividend (<1% yield) and prioritizes buybacks and generation growth capex over payout.
Competitive Snapshot
| Company | EBITDA Margin | 3Y Rev CAGR | FCF Margin | Leverage | Fwd P/E |
|---|---|---|---|---|---|
CEG Constellation Energy | ~30% | ~10% | ~12% | ~1.5x net debt/EBITDA | ~28x |
TLN Talen Energy | ~35% | ~15% | ~10% | ~2x | ~22x |
NRG NRG Energy | ~15% | ~8% | ~8% | ~3x | ~15x |
PEG Public Service Enterprise Group | ~40% | ~2% | negative | ~4x | ~18x |
VST sits between the pure nuclear premium of CEG (28x forward) and the regulated-utility discount of PEG, offering a diversified 44 GW merchant fleet at a cheaper 14.4x. Against Talen — the higher-risk, higher-beta way to play tight PJM power — Vistra is larger, more profitable and better hedged, trading at a comparable multiple with lower single-market concentration. NRG is optically similar on P/E but carries thinner margins and less nuclear/AI-contract optionality.
Business & Strategy
Vistra operates five segments — Retail, Texas, East, West and Asset Closure — pairing a ~5 million-customer retail book with 44 GW of gas, nuclear, coal, solar and battery generation. The strategic mix is shifting toward contracted, zero-and-firm-capacity assets via Cogentrix and hyperscaler PPAs, deepening exposure to AI-driven load growth in ERCOT and PJM.
Serves ~5 million residential, commercial and industrial retail customers plus wholesale counterparties, now anchored by 20-year contracts with Meta and Amazon Web Services.
Integrated model spans retail electricity/gas sales, wholesale generation, commodity risk management and fuel logistics, letting Vistra capture both retail margin and merchant spark/dark spreads. Long-dated hyperscaler PPAs add a growing layer of contracted, credit-quality cash flow.
Natural gas and fuel procurement, plant O&M, capex on new gas/battery/solar builds, and interest expense on ~$19.9B of debt.
The moat is scale plus dispatchability: 44 GW of physical generation, an integrated retail hedge, and a nuclear base are near-impossible to replicate as interconnection queues and permitting throttle new supply. In a power-constrained AI buildout, owning existing firm capacity in ERCOT/PJM is the durable edge.
Monetary-Policy Sensitivity
- Lower refinancing cost on ~$19.9B debt load
- Higher DCF valuation for long-duration generation assets
- Improved appetite for capital-intensive AI-power capex
With 355% debt/equity and heavy capex, VST is a clear beneficiary of falling rates through both lower interest expense and multiple expansion on long-dated cash flows. The offsetting risk: rate cuts often accompany softening demand, though AI/data-center load is largely insensitive to the macro cycle.
SWOT Analysis
- 44 GW diversified fleet with nuclear/gas firm capacity ideally positioned for AI load
- 20-year Meta and AWS PPAs plus Cogentrix add contracted cash flow
- Cheap valuation: 14.4x forward P/E, 10.9x EV/EBITDA, 0.47 PEG on 43% growth
- 42.9% ROE and 34.9% EBITDA margins with strong buyback history
- High leverage: 355% debt/equity, ~$19.3B net debt, 0.896 current ratio
- Thin 2.45% FCF margin and 0.9% FCF yield
- Volatile, commodity-driven quarterly EPS (1 beat in 4 quarters, -6.3% avg surprise)
- Coordinated insider selling of -$6.86M near the highs
- Secular AI/data-center power demand in ERCOT and PJM
- Additional hyperscaler PPAs and nuclear uprates/life extensions
- Record heat-driven peak demand lifting merchant power prices
- Rate cuts easing refinancing and lifting DCF valuations
- Merchant power-price and weather volatility
- Refinancing risk if rates stay elevated given tight liquidity
- Regulatory/permitting and coal-retirement execution risk
- Multiple de-rating if AI-power enthusiasm cools
Catalysts & Event Risks
- 2026-08-07Q2 2026 earnings
Aug. 7 print tests whether Q1's +112% beat and margin surge are durable or hedge-timing noise.
- Q3 2026Cogentrix integration & PPA ramp
Execution on the $4B Cogentrix deal and commencement of Meta/AWS 20-year contracts adds contracted cash flow visibility.
- Q3 2026Summer peak power prices
Record heat-dome demand across ERCOT/PJM should support merchant spreads and drive upside to guidance.
- Q4 2026New hyperscaler PPA announcements
Additional data-center power contracts would extend the contracted growth runway and re-rate the multiple.
- Q4 2026Fed rate decisions
Rate cuts would lower financing costs on the ~$19.9B debt load and lift valuation on long-duration assets.
The Aug. 7 earnings print is the near-term swing factor given VST's history of large surprises in both directions, while summer peak demand and PPA ramp provide a supportive second-half backdrop. Positioning ahead of results carries elevated event risk.
Technical Analysis
VST trades at $155.73, below both the 50-day ($154.42) and 200-day ($168.08) averages after a 29% correction from the $219.82 high — a consolidation/basing setup rather than a clean uptrend. Immediate support sits at the $154 50-day and then the $132.66 52-week low; reclaiming the $168 200-day is the key hurdle to resume the trend. At the 26th percentile of its 52-week range with 43% consensus upside, the risk-reward skews favorable for accumulation, but confirmation requires a move back above $168 on volume.
Verdict
Macro context. The dominant macro tailwind is AI data-center electricity demand colliding with a supply-constrained grid — record heat-dome peaks pushed PJM to all-time demand highs, and nuclear/firm dispatchable capacity is the scarce commodity hyperscalers are contracting 20 years out. Falling rates and Texas's data-center power boom further support merchant IPP economics.
Vistra is the scaled, diversified, and cheapest way to own the AI-power supercycle: 44 GW of firm generation, freshly contracted Meta/AWS cash flows via Cogentrix, 43% revenue growth and a 42.9% ROE — all for 14.4x forward earnings and a 0.47 PEG. The offsets are real: 355% debt/equity, thin free cash flow, lumpy quarterly EPS, and coordinated insider selling into the highs. We rate VST ACCUMULATE with a $200 target (28% upside), preferring to build the position on the 29% pullback and into the Aug. 7 print rather than chase, with a reclaim of the $168 200-day as the technical confirmation to add.
Data source: Yahoo Finance / yfinance · fetched 7/8/2026, 6:49:46 AM