Vistra Corp. (VST): what the price assumes
In the published model solve dated 2026-Q2, anchored at $138.14, Vistra Corp. (VST) is priced for +9.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/VST
Headline
| Field | Value |
|---|---|
| Ticker | VST |
| Company | Vistra Corp. |
| Current price | $138.14/sh |
| Composition | Retail energy charge in ERCOT 51% / Retail energy charge in Northeast/Midwest 23% / Wholesale generation revenue from ISO/RTO 18% / Capacity revenue from ISO/RTO 1% / Revenue from other wholesale contracts 6% / Transferable PTC revenues 1% / Hedging revenues - realized 3% / Hedging revenue - unrealized -4% / Business interruption insurance proceeds 1% / Intangible amortization and other revenues 0% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 10.2% |
| Operating margin today | 18.5% |
| Margin compression (value-band) | -8.3pp |
| Implied growth | 9.5% |
| Multiple paid | 18x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 8.6% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.23σ |
| cohort percentile (of 70 peers) | 34 |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.58x | 4 | expensive |
| Earnings | 8.88x | 5 | expensive |
| Relative | 0.64x | 2 | justifies |
| Growth | 0.83x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.8%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $224.90 | 0.61x | yes | FCF base $2.3B, growth 6% (input: historical growth), terminal g 4.0%, WACC 6.8%, 5yr projection |
| DCF Exit Multiple | Growth | $166.91 | 0.83x | yes | Exit EV/EBITDA: 10.1x / 12.1x / 14.1x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 20x (static sector reference · 2026-04), scenarios: 16.8x / 20.0x / 23.2x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $71.47 | 1.93x | yes | BV/sh $16.33, ROE (TTM) 40.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $166.89 | 0.83x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $123.23 | 1.12x | yes | Rev $19.3B, growth 6% (input: historical growth; tapered), Terminal P/S: 2.0x / 2.4x / 2.8x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $207.55 | 0.67x | yes | EPS $5.93, growth 35% (input: historical EPS growth), PEG=0.60 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $11.19 | 12.34x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.15B × (1−29%) / WACC 6.8% → EPV (no growth) |
| Residual Income | Asset | $113.31 | 1.22x | yes | BV $16.33 + 5yr PV of (ROE (TTM) 40.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $46.68 | 2.96x | yes | √(22.5 × EPS $5.93 × BVPS $16.33) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $5.42B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $15.55 | 8.88x | yes | FCF $2255.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $11.23 | 12.30x | yes | SBC-adj FCF $2.12B (FCF $2.25B − SBC $0.13B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $191.34 | 0.72x | yes | EPS $5.93 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.83 | 36.07x | yes | BV $16.33 × (ROIC 1.6% / WACC 6.8%) (excluded from median) |
| P/Sales Sector | Relative | — | — | no | Revenue $19.28B × sector P/S 2.5x |
| PEG Fair Value | Relative | $222.38 | 0.62x | yes | EPS $5.93 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $64.11 | 2.15x | yes | EPS $5.93 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Retail | operating | enterprise | 14.3B reported-currency | — | withheld | unresolved no unit value |
| Texas | operating | enterprise | 5.4B reported-currency | — | withheld | unresolved no unit value |
| Asset Closure | operating | enterprise | 0.1B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $19.4b |
| Net debt / NOPAT (after-tax) | 7.62x |
| Net debt / operating income (pre-tax) | 5.44x |
| Interest coverage | 3.1x |
| Share count CAGR (buyback) | -5.7% |
| Burning cash | no |
Bullet Takeaways
- Vistra is a merchant power company, not a regulated utility, which means it sells electricity at market prices and lives or dies on the spread between what its plants cost to run and what power fetches; its nuclear and gas fleet is now selling into a tightening grid.
- The defining risk is leverage against volatility: net debt sits above $18 billion, more than five times operating income, on a business whose earnings swing with weather and commodity prices.
- What to watch is the data-center pipeline converting to signed contracts: Vistra has already locked 20-year power agreements totaling 3,800 MW with Meta and Amazon Web Services and is acquiring a 5,500 MW gas portfolio for about $4 billion.
Bull Case
Valuing a merchant power company is its own discipline, and the sector lens is what makes Vistra interesting right now. Unlike a regulated utility that earns a fixed return on its rate base, Vistra captures the full upside when power prices rise, and prices are rising because the grid is tightening faster than new supply can be built. The structural driver is electricity demand from data centers and AI, the first sustained load growth the US grid has seen in a generation, arriving just as coal retirements and intermittent renewables make dispatchable power scarcer. Vistra owns exactly the asset that scarcity rewards: a large fleet of nuclear and gas plants that run when the wind does not blow and the sun does not shine.
The business model is built to harvest that scarcity without betting the company on spot prices. The 10-K describes the edge as "a scaled retail platform with disciplined wholesale risk management capabilities," a combination that "remains a core competitive advantage and supports more stable and predictable cash flows across commodity price cycles." Selling power to its own retail customers hedges the wholesale generation, smoothing the cycle that wrecks pure merchant generators. On top of that, the filing notes that "long-term contracts entered in 2025 underwrite higher base profitability," which is exactly what the data-center deals are: multi-decade agreements that convert a volatile commodity stream into contracted, utility-like cash flow.
The capital returns confirm where management sees value. Vistra has been buying back stock aggressively, shrinking the share count at roughly a 7% annual pace, with $1.5 billion of authorization still remaining. A merchant generator buying its own shares while signing 20-year contracts with hyperscalers is making a clear statement: it believes the cash flow is durable and the stock undervalues it. With ongoing adjusted EBITDA guided to $6.8 billion to $7.6 billion for 2026 and free cash flow before growth approaching $4 billion, the company has the firepower to fund both the buyback and the expansion. The bet is that the power-demand supercycle is real and Vistra is positioned at its center.
Bear Case
The advantage Vistra leans on, owning scarce dispatchable generation, is precisely what the rest of the industry is racing to erode. The 10-K is explicit that the threat to its model includes the "development and availability of new fuels, new technologies and new forms of competition for the production and storage of power, including competitively priced alternative energy sources or storage." Battery storage, new gas capacity, and renewables paired with storage all chip at the premium that today's tight grid pays for firm power. The data-center demand is real, but so is the supply response it is summoning, and a few years of heavy capacity additions can turn today's scarcity premium into tomorrow's oversupply. Merchant power has cycled this way before.
The earnings themselves are less stable than the headline EBITDA suggests, because they are exposed to weather and commodity swings the company cannot control. The 10-K notes that "periods of extreme weather, including prolonged high temperatures during summer months or severe cold during winter months, can materially increase electricity demand" and reshape supply, and the same volatility that lifts a hot summer can crush a mild one. The reported numbers include large unrealized hedging gains that can reverse, so a single quarter's profit is a noisy read on the underlying business. The price is paying about 37 times operating income, which inverts to growth held near the self-funding ceiling for roughly seven years, a demanding bet for a company whose multiple already sits at the very top of its peer group.
The balance sheet is the real constraint. Vistra carries net debt above $18 billion, more than five times operating income, with interest coverage around three times, on the lower end for a business this cyclical. The roughly $4 billion Cogentrix acquisition and the Perry nuclear restart add to the capital commitments, and they are being layered on top of an already-levered balance sheet while the company also buys back stock. That is an aggressive capital plan that assumes power prices stay high. If the demand wave crests or a mild-weather year compresses spreads, the leverage that magnifies the upside magnifies the downside just as fast, and the static value methods, which land well below the price, are where the stock falls back toward.
Valuation
The price is betting on a power-demand supercycle. At $164 (June 28, 2026) the market pays about 37 times company-wide operating income, which inverts to operating growth held near its self-funding ceiling for roughly seven years. The pace is within what Vistra has recently delivered, but the multiple sits at the very top of its peer distribution, well beyond the upper quartile, and only about 31% of comparable fast-growers sustained that pace for even seven years. The bet is that the data-center demand keeps grid scarcity, and Vistra's spreads, elevated.
The methods we use to triangulate are unusually balanced for a name this richly priced, which says the growth case is at least defensible. The cash-flow projection lands almost exactly at the price, and the exit-multiple version reaches above it. The peer-multiple methods, comparing Vistra to its sector on earnings and EV/EBITDA, land in the $148 to $154 range, just below. The static value lenses are where the gap opens: the earnings-power method, capitalizing normalized profit with no growth, lands near $20, and the asset-value methods sit far below the price. The pattern is a growth-and-contract premium: the forward methods reach the price because they credit the contracted load growth, while the no-growth frames cannot. That is the durability bet stated in numbers. The closest peers are other power and energy-infrastructure names, though Vistra's merchant-plus-retail model differs from the regulated utilities in the cohort.
Solvency is where the bull and bear cases meet. Net debt above $18 billion at more than five times operating income, with coverage near three times, is a meaningful load for a cyclical generator, and the Cogentrix deal and Perry restart add to it. The offset is real free cash flow, guided near $4 billion before growth, which funds the buyback that has shrunk the share count at roughly 7% a year. The leverage bounds the downside tightly: in a strong-price environment it amplifies returns, but in a weak one it leaves little margin. The price has chosen to believe in the strong environment.
Catalysts
Vistra's Q1 2026 print underscored how much the power cycle is working in its favor. Revenue reached about $5.64 billion, ahead of expectations, with GAAP net income of roughly $1,029 million that included an unrealized hedging gain, and ongoing operations adjusted EBITDA of about $1,494 million, up roughly 20% from a year earlier on higher realized energy and capacity prices in Texas and the East. Management reaffirmed full-year 2026 guidance for ongoing operations adjusted EBITDA of $6.8 billion to $7.6 billion and adjusted free cash flow before growth of $3.925 billion to $4.725 billion.
The contracted-demand pipeline is the catalyst that matters most. Vistra has secured 20-year power purchase agreements totaling 3,800 MW with Meta and Amazon Web Services at its nuclear sites, converting volatile merchant generation into multi-decade contracted cash flow. On the growth side, the company plans to acquire a roughly 5,500 MW natural gas portfolio from Cogentrix for about $4 billion and to restart its Perry nuclear plant, both adding firm capacity into a tightening grid. Capital returns continue alongside, with about $1.5 billion remaining under the buyback authorization. The watch items are whether more data-center contracts get signed and whether power prices hold as new supply arrives.
Peer Cohorts (Per Segment, With Filing Citations)
Retail / Texas / Asset Closure (reported)
- CEG (CONSTELLATION ENERGY CORPORATION)
- FY2025 10-K: …the output from owned and contracted generation are managed using various commodity transactions including sales to retail customers, trades on commodity exchanges, bilateral contracts, and sales to wholesale counterparties in accordance with our hedging program. See further discussion of the hedging program in the…
- FY2025 10-K: …response programs can rapidly increase supply or depress demand. In addition, in some markets, the supply of electricity can exceed demand during some hours of the day, resulting in lower market prices, including periods of negative pricing, and loss of revenue for baseload generating plants such as our nuclear…
- NRG (NRG Energy, Inc)
- FY2025 10-K: …and regulations and actions of the ISO and RTOs; • weather conditions, including extreme weather conditions and seasonal fluctuations, including the effects of climate change; • changes in commodity prices and the supply of commodities, including but not limited to natural gas, coal and oil; • changes in the demand…
- FY2025 10-K: …nrg:WestServicesAndOtherSegmentMember 2024-01-01 2024-12-31 0001013871 us-gaap:OperatingSegmentsMember nrg:ProductsAndServicesRetailRevenueMember nrg:VivintSmartHomeIncMember 2024-01-01 2024-12-31 0001013871 us-gaap:IntersegmentEliminationMember nrg:ProductsAndServicesRetailRevenueMember 2024-01-01 2024-12-31…
- TLN (Talen Energy Corporation)
- FY2025 10-K: …for additional information on both the RMR arrangements and the AWS PPA. We continue to evaluate business opportunities resulting from technological and industrial load growth. See "-Demand Growth from Multiple Sources" for additional information. We also benefit from the Nuclear PTC under the Inflation Reduction…
- FY2025 10-K: …on an open-access, non-discriminatory basis. Although these regulations are designed to encourage competition in wholesale markets, there can be no assurance that transmission capacity will be available in the amounts we require. We cannot predict the timing of industry changes as a result of these initiatives, the…
- BEPC (BROOKFIELD RENEWABLE CORPORATION)
- FY2025 20-F: …country:CO 2024-01-01 2024-12-31 0001791863 bepc:ImpactOfFivePercentIncreaseMember bepc:FutureElectricityPricesMember country:BR 2024-01-01 2024-12-31 0001791863 bepc:ImpactOfFivePercentIncreaseMember bepc:FutureElectricityPricesMember srt:EuropeMember 2024-01-01 2024-12-31 0001791863…
- FY2025 20-F: …or her interest and refrains from voting on such matter. Significant related party transactions, if any, are reviewed and approved by an independent committee made up of independent directors who may be advised by independent counsel and independent advisors. Personal Trading Policy Brookfield has adopted a personal…
- CWEN (Clearway Energy, Inc.)
- FY2025 10-K: …cwen:EnergyRevenueMember cwen:RenewablesAndStorageMember 2025-01-01 2025-12-31 0001567683 us-gaap:OperatingSegmentsMember cwen:EnergyRevenueMember 2025-01-01 2025-12-31 0001567683 us-gaap:OperatingSegmentsMember cwen:CapacityRevenueMember cwen:FlexibleGenerationMember 2025-01-01 2025-12-31 0001567683…
- FY2025 10-K: …us-gaap:FairValueInputsLevel3Member us-gaap:ValuationTechniqueDiscountedCashFlowMember srt:MaximumMember 2024-12-31 0001567683 us-gaap:EnergyRelatedDerivativeMember us-gaap:MeasurementInputCommodityForwardPriceMember us-gaap:FairValueInputsLevel3Member us-gaap:ValuationTechniqueDiscountedCashFlowMember…
- AQN (ALGONQUIN POWER & UTILITIES CORP.)
- FY2025 40-F: …a 9.38 % ROE. The RA approved incremental revenue decrease of $ 3.6 million for 2026 and increase of $ 2.0 million for 2027 (excluding fuel costs). Algonquin Power & Utilities Corp. Notes to the Consolidated Financial Statements December 31, 2025 and 2024 (in millions of U.S. dollars, except as noted and per share…
- FY2025 40-F: …the corresponding unbilled revenue is recorded. These estimates of unbilled revenue and sales are based on the ratio of billable days versus unbilled days, amount of electricity or natural gas procured during that month, historical customer class usage patterns, weather, line loss, unaccounted-for natural gas and…
- AEP (AMERICAN ELECTRIC POWER CO INC.)
- FY2025 10-K: …tables below represent AEP's reportable segment revenues from contracts with customers, net of respective provisions for refund, by type of revenue: Year Ended December 31, 2025 VIU T&D AEPTHCo G&M Corporate and Other Reconciling Adjustments AEP Consolidated (in millions) Retail Revenues: Residential Revenues $ 4,969…
- FY2025 10-K: …economic hedge activity. 331 The tables below represent revenues from contracts with customers, net of respective provisions for refund, by type of revenue for the Registrant Subsidiaries: Year Ended December 31, 2025 AEP Texas AEPTCo APCo I&M OPCo PSO SWEPCo (in millions) Retail Revenues: Residential Revenues $ 758…
- HE (HAWAIIAN ELECTRIC INDUSTRIES, INC.)
- FY2025 10-K: …on or before January 20, 2026. On October 16, 2025, the PUC issued an order, addressing the various motions for Participation and Intervention in the docket. On October 22, 2025, the Utilities filed feedback on the PUC's proposed Track B, Intragovernmental Shared Credit Program. The Utilities support the program but…
- FY2025 10-K: Regulatory revenue ( 29,471 ) - ( 29,471 ) Other 38,978 2,045 41,023 Total revenues from other sources 9,507 2,045 11,552 Total revenues $ 3,071,182 $ 15,714 $ 3,086,896 Timing of revenue recognition Total revenues from contracts with customers - services/goods transferred over time $ 3,061,675 $ 13,669 $ 3,075,344…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 earnings release, 2026 · company announcements, 2026