Vistra Corp. (VST): what the price requires
At today's price, Vistra Corp. (VST) is priced for today's economics sustained for ~7.1 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/VST
Headline
| Field | Value |
|---|---|
| Ticker | VST |
| Company | Vistra Corp. |
| Current price | $157.50/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 Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Must persist for | 7.1y |
| Multiple paid | 36x operating income |
Solve inputs: computed at a 9.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | -0.10σ |
| cohort percentile (of 70 peers) | 90 |
| sustained it ~7.1 years at this level | 31% |
| implied end-window share | 0% |
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 | 2.22x | 5 | expensive |
| Earnings | 2.44x | 3 | expensive |
| Relative | 1.02x | 5 | expensive |
| Growth | 0.93x | 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 7.1%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $169.56 | 0.93x | yes | FCF base $1.9B, growth 8% (input: historical growth), terminal g 4.0%, WACC 7.1%, 6yr projection |
| DCF Exit Multiple | Growth | $195.48 | 0.81x | yes | Exit EV/EBITDA: 11.2x / 13.2x / 15.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $147.56 | 1.07x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.6x / 20.0x / 23.4x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $70.87 | 2.22x | yes | BV/sh $16.37, ROE (TTM) 40.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $163.96 | 0.96x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $151.63 | 1.04x | yes | Rev $19.1B, growth 8% (input: historical growth; tapered), Terminal P/S: 2.3x / 2.8x / 3.3x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $209.30 | 0.75x | yes | EPS $5.98, growth 35% (input: historical EPS growth), PEG=0.69 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $20.51 | 7.68x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.06B × (1−15%) / WACC 7.1% → EPV (no growth) |
| Residual Income | Asset | $112.22 | 1.40x | yes | BV $16.37 + 5yr PV of (ROE (TTM) 40.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $46.94 | 3.36x | yes | √(22.5 × EPS $5.98 × BVPS $16.37) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $153.92 | 1.02x | yes | EBITDA $5.47B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $2.82 | 55.85x | yes | FCF $1803.0M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 15750.00x | yes | SBC-adj FCF $1.68B (FCF $1.80B − SBC $0.12B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $192.95 | 0.82x | yes | EPS $5.98 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $12.12 | 13.00x | yes | BV $16.37 × (ROIC 5.3% / WACC 7.1%) |
| P/Sales Sector | Relative | $139.88 | 1.13x | yes | Revenue $19.13B × sector P/S 2.5x |
| PEG Fair Value | Relative | $224.25 | 0.70x | yes | EPS $5.98 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $64.65 | 2.44x | yes | EPS $5.98 / 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 | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $18.8b |
| Net debt / NOPAT (after-tax) | 11.59x |
| Net debt / operating income (pre-tax) | 9.84x |
| Share count CAGR (buyback) | -6.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
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)
- (no filing in the citation store)
- NRG (NRG Energy, Inc)
- (no filing in the citation store)
- TLN (Talen Energy Corporation)
- (no filing in the citation store)
- BEPC (BROOKFIELD RENEWABLE CORPORATION)
- (no filing in the citation store)
- CWEN (Clearway Energy, Inc.)
- (no filing in the citation store)
- AQN (ALGONQUIN POWER & UTILITIES CORP.)
- (no filing in the citation store)
- AEP (AMERICAN ELECTRIC POWER CO INC.)
- (no filing in the citation store)
- HE (HAWAIIAN ELECTRIC INDUSTRIES, INC.)
- (no filing in the citation store)
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.
- 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