Evaluating Vistra Against Peers In Independent Power and Renewable Electricity Producers Industry

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In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Vistra VST vis-à-vis its key competitors in the Independent Power and Renewable Electricity Producers industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.

Vistra Background

Vistra Energy is one of the largest power producers and retail energy providers in the us Following the 2024 Energy Harbor acquisition, Vistra owns 41 gigawatts of nuclear, coal, natural gas, and solar power generation along with one of the largest utility-scale battery projects in the world. Its retail electricity business serves 5 million customers in 20 states, including almost a third of all Texas electricity consumers. Vistra emerged from the Energy Future Holdings bankruptcy as a stand-alone entity in 2016. It acquired Dynegy in 2018.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Vistra Corp 58.98 10.50 2.62 -2.79% $0.75 $0.84 -30.98%
The AES Corp 28.16 5.04 1.17 18.99% $0.95 $0.62 -4.75%
Central Puerto SA 7.31 0.97 3.70 2.24% $105.37 $55.89 21.92%
Average 17.73 3.0 2.44 10.61% $53.16 $28.25 8.59%

Through a thorough examination of Vistra, we can discern the following trends:

  • Notably, the current Price to Earnings ratio for this stock, 58.98, is 3.33x above the industry norm, reflecting a higher valuation relative to the industry.

  • The elevated Price to Book ratio of 10.5 relative to the industry average by 3.5x suggests company might be overvalued based on its book value.

  • The stock's relatively high Price to Sales ratio of 2.62, surpassing the industry average by 1.07x, may indicate an aspect of overvaluation in terms of sales performance.

  • The Return on Equity (ROE) of -2.79% is 13.4% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

  • The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $750 Million is 0.01x below the industry average, suggesting potential lower profitability or financial challenges.

  • The company has lower gross profit of $840 Million, which indicates 0.03x below the industry average. This potentially indicates lower revenue after accounting for production costs.

  • The company's revenue growth of -30.98% is significantly below the industry average of 8.59%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

In terms of the Debt-to-Equity ratio, Vistra stands in comparison with its top 4 peers, leading to the following comparisons:

  • In terms of the debt-to-equity ratio, Vistra is positioned in the middle among its top 4 peers.

  • This suggests a relatively balanced financial structure, where the company maintains a moderate level of debt while also utilizing equity financing with a debt-to-equity ratio of 5.16.

Key Takeaways

For Vistra in the Independent Power and Renewable Electricity Producers industry, the high PE, PB, and PS ratios suggest that the company is relatively overvalued compared to its peers. Additionally, the low ROE, EBITDA, gross profit, and revenue growth indicate weaker financial performance and growth potential compared to industry competitors.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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